Need help converting tIRA with basis to Roth IRA

[Raymond01]

Years ago I opened a tIRA with post tax money before Roth IRA's existed. The account has grown a bit of course. How do I convert the tIRA to a Roth and not pay taxes on the original amount I opened the account with? And what tax forms do I need to fill out and info do they need? Will TurboTax handle the forms for me? Any help is appreciated.

 

[timbervest]

Do you have an active 401(k) plan that allows rollovers? If so, you can roll the untaxed portion of your tIRA into the 401(k) and then convert the remainder post tax money (basis) to a Roth. I did this ten years ago. Also, if you keep the empty tIRA open you can make backdoor ROTH contributions.

You cannot just convert the pre-tax money directly to a ROTH without paying taxes.

Note: I am just SGOTI so consult competent legal/tax advise.

 

[Dash man]

Yes, you can roll pretax money into a Roth along with the earnings. Do you have a record of the transaction from filing Form 8606 in the year you made the pretax contribution?

About Form 8606, Nondeductible IRAs | Internal Revenue Service

Information about Form 8606, Nondeductible IRAs, including recent updates, related forms, and instructions on how to file. Form 8606 is used to report certain contributions and distributions to/from specific types of IRAs.

www.irs.gov

 

[MarieIG]

Yes, I did as noted in posts #2 and #3.

If you are unable to transfer the pre-tax funds out to a 401(k) type account - the conversions would be considered to be taxable on a pro rata basis - with only the post tax amount contributed to be tax free. My accountant filed the 8606 ever year.

 

[Raymond01]

I do not have a 401k, I rolled it into a rollover IRA about 10 years ago when I retired.

Dashman, do you mean I can roll "post tax" money? You said "pre tax" money, but I did pay taxes on the original amount.

Not sure if I filed a 8606 at the time I opened the tIRA, I'm hoping so. Any way I can easily find that, or do I need to look at all my past returns for the past 20 years?

 

[MarieIG]

I found an article on Kitces' website regarding what to do if you didn't file the 8606s.

Reconstructing Lost IRA Basis To Avoid Double Taxation

Taxpayers may still be able to deduct tax-free distributions, even if they have ‘lost track’ of the basis in their Traditional IRA accounts.

www.kitces.com