So I think i got some bad advice from USAA... Please help if you can.
Starting in 2011 and each year since, I've made a non-deductible contribution for the max amount into a traditional IRA. Each year I would then convert the full amount of each traditional IRA over to the the Roth IRA, leaving $0 behind. Each year USAA would then close the traditional IRA after the conversion because of the $0 balance, and the following year I would have to go through the paperwork hassle of opening a brand new traditional IRA from scratch.
In 2016 the USAA advisor told me to leave $100 behind in the traditional IRA so that it wouldn't be closed, which I did and converted $5400 to the Roth. The $100 is in an "FDIC account", and the current value is now $100.01.
Now as I start my taxes and look at form 8606, it looks as though I have created a basis for myself for line 2. Line 14 of my 2016 form 8606 says $100, so my understanding is that that $100 now goes to line 2 of my 2017 form 8606.
1. For 2017 taxes - Am I doing this right? Even though all contributions have been non-deductible, Innow have a basis?
2. For 2018 - I haven't made an IRA contribution yet. Should I contribute as usual and then convert all $5600 ($5500 and the left over $100) this year and let the traditional IRA close again?
3. I have some other accounts at Fidelity and am thinking of moving the Roth there. Does Fidelity close $0 dollar traditional IRAs as well?
Starting in 2011 and each year since, I've made a non-deductible contribution for the max amount into a traditional IRA. Each year I would then convert the full amount of each traditional IRA over to the the Roth IRA, leaving $0 behind. Each year USAA would then close the traditional IRA after the conversion because of the $0 balance, and the following year I would have to go through the paperwork hassle of opening a brand new traditional IRA from scratch.
In 2016 the USAA advisor told me to leave $100 behind in the traditional IRA so that it wouldn't be closed, which I did and converted $5400 to the Roth. The $100 is in an "FDIC account", and the current value is now $100.01.
Now as I start my taxes and look at form 8606, it looks as though I have created a basis for myself for line 2. Line 14 of my 2016 form 8606 says $100, so my understanding is that that $100 now goes to line 2 of my 2017 form 8606.
1. For 2017 taxes - Am I doing this right? Even though all contributions have been non-deductible, Innow have a basis?
2. For 2018 - I haven't made an IRA contribution yet. Should I contribute as usual and then convert all $5600 ($5500 and the left over $100) this year and let the traditional IRA close again?
3. I have some other accounts at Fidelity and am thinking of moving the Roth there. Does Fidelity close $0 dollar traditional IRAs as well?
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