Backdoor Roth - foolishly invested before converting/stocks went down

[Saaybogle]

Dear BHs, I made a foolish mistake when starting my backdoor roth this year. I invested the money in VTSAX instead of leaving it in cash when contributing to my Traditional IRA. However, the fund has gone down in value so it's below my cost basis. Am I correct in understanding that this should create no problem when converting the shares from the TIRA to my Roth, given there will be losses and not gains? I'm looking at the Form 8606 and I see that I'd have to report the gains on my taxes, but nothing to do if there's only losses.
Thanks.

[MrJedi]

No problem. You still keep the remaining basis and it will apply to pretax funds you may have in the future.

[Faith20879]

Agree with the previous poster. It may even turn out be in your favor. For example your basis is 6000 and the value converted is 5000, you may get to use that 1000 in your advantage next year. I have a client in similar situation and ended up with about 300 extra basis. He's been using it a little bit each year by carrying 4 decimals in form 8606 line 10. The key is to keep a good 8606. HTH.

[retiredjg]

You can convert now or later. It does not matter because you are converting shares, not dollars. You have not lost any shares.

In spite of what has been said above, we've been told that some software will not carry over the unused basis...so don't be surprised if that happens. Again, you will not have lost anything that was actually yours to begin with.