Any ideas on what the distribution code should be for a traditional IRA back doored to a Roth IRA?
You didn't state whether you or wife had any other IRAs other than the ones you opened with these 2012 contributions. That could be a whole other issue.
If you want specific help on inputting things in your software, then it would help if you would say what it is.
The more relevant issue here is the taxable amount for the conversion. Taxable amounts show in Box 2a, and for TIRA distribution including a conversion, the TIRA custodian has no idea whether your TIRA has basis or not. The IRS instructions have changed over the years with respect to whether the custodian should therefore show nothing in Box 2a or show the gross distribution there. Currently, the 1099R instructions indicate that the full amount should go in 2a if the custodian knows you converted and the "taxable amount not determined" Box in 2b should be checked.
From that point the taxpayer needs to correctly input the basis from Form 8606 into the software and since there are software variations between providers, this is where most people run into problems. It really helps if you understand what the taxable amount should be under the pro rate rules, so if you get something illogical you will know that the input needs to be reviewed and changed. Most programs allow you to review Form 8606 before filing so you can see the final result.
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