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Fixing multiple backdoor Roth mistakes

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  • Fixing multiple backdoor Roth mistakes

    I just had a question about fixing mistakes on 8606. I have done backdoor Roths since 2018, but due to not reading the instructions I believe I have made just about every error on them possible and am just now realizing this. I was hoping someone would be able to tell me if I have corrected my 8606 forms appropriately. This is what I did:

    Nov 2018 – Traditional IRA contribution of 5500, bought VTSAX which lost value before conversion
    Dec 2018 – Converted the new value of 4820.28 to Roth
    12/31/18 traditional IRA value: 0
    Basis: 680

    Dec 2019 – Traditional IRA contribution of 6000, left in settlement fund
    12/31/19 traditional IRA value: 6000.51
    Basis 6680?

    Feb 2020 – Converted 6000 to Roth (for year 2019)
    April 2020 – Traditional IRA contribution of 6000, left in settlement fund
    July 2020 – Converted 6000 to Roth
    12/31/20 traditional IRA value: 17.12
    Basis: 12680?

    These are what I originally put in TurboTax but with my hand corrections for 2018 and 2019. Have I redone these correctly? I think that I will just need to file a correction to the 8606 for 2019 if so. And if I’m understanding what is going on, is the fact that I lost money before conversion the first year keeping me from incurring the pro rata rule? Thanks so much in advance for any help and for all this board does.

  • #2
    If you did not deduct any of your 2018 TIRA contribution and you have no other pre-tax TIRAs, your 2018 basis s/b $4,820, the amount you converted.
    Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087


    • #3
      I don't think I'm understanding. I thought the basis would be the TIRA contribution minus the Roth conversion amount (line 3 minus line 13), not identical to the converted amount. Is that incorrect? Thanks!