Need help with backdoor Roth 1099-R

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Topic Author
worthit
Posts: 1023
Joined: Tue Jun 19, 2018 2:10 pm

Need help with backdoor Roth 1099-R

Post by worthit »

BHs:

I contributed $7500 last year towards my backdoor Roth. Before I rolled the amount to my Roth I purchased VTI.

The 1099-R generated by my custodian has the following information:

Boxes 1 and 2 have $7664.

Boxes 2b is checked - both for taxable and total distribution.

Box 7 is coded 2, IRA/SEP SIMPLE is checked.

I am guessing the $164 (off the $7664) is the total gains of the appreciated VTI before the roll over occurred. Right?

If so, I am assuming I have to pay taxes on the $164? And by doing so I will be fine?

Thanks.
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Duckie
Posts: 9792
Joined: Thu Mar 08, 2007 1:55 pm

Re: Need help with backdoor Roth 1099-R

Post by Duckie »

worthit wrote: Mon Apr 01, 2024 9:01 pm I am guessing the $164 (off the $7664) is the total gains of the appreciated VTI before the roll over occurred. Right?
Before the conversion, right.
If so, I am assuming I have to pay taxes on the $164? And by doing so I will be fine?
Yes. You will include the 1099-R with your return which will put the Box 1 amount on your Form 1040 line 4a. You will fill out Form 8606 Part I for the non-deductible contribution and Part II for the conversion. Assuming you have no previous basis, line 16 will be the amount converted, line 17 the amount contributed (non-deductible basis), and line 18 will be the taxable amount of $164. Line 18 will transfer to your Form 1040 line 4b.
Topic Author
worthit
Posts: 1023
Joined: Tue Jun 19, 2018 2:10 pm

Re: Need help with backdoor Roth 1099-R

Post by worthit »

Thanks Duckie.
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