IRA conversion to Roth - 8606 line 16
I am 66 years young and hoping you can help with a clarification. I have money in a traditional IRA. It includes only rollovers of pre-tax monies from former employer 401k plans. The IRA has NO after tax money. The rollovers were done in prior years and deposited into the IRA. I have not made any additional contributions to the IRA account over the years. In 2025, I took out a couple of distributions from the IRA for my personal expenses. In addition, I also had a separate distribution from the same IRA that had monies converted to the Roth IRA. (I had Charles Schwab take estimated fed and state taxes taken out for all these distributions). I do not have a form 5498 as they don't come out until May. I have a monthly brokerage statement that shows for the IRA to Roth conversion portion, I had a distribution from the IRA of $25,000 gross, and with estimated taxes already taken out, it left a net of $18,250 that was then deposited into Roth.
The 1099R from the brokerage shows in box 1 and 2a the gross distribution amount of ALL the distributions I took out for the year. (This amount populates on line 4a and 4b as taxable income in the 1040 form). Box 2B has the check mark in the box for "Taxable Amount not determined". Box 7 had a distribution code of "7" and the box checked for "IRA/SEP/Simple". Boxes 4 and 14 show the fed and state taxes already taken out. When the FreeTaxUSA screen asks "Did you convert part or all of this distribution from a traditional IRA to a Roth IRA", I answered YES. The next question in FreeTaxUSA screen says "Enter how much of the distribution you converted from a traditional IRA to Roth IRA". Am I entering the gross of $25,000 or the net of $18,250 that was deposited into the Roth for the conversion amount? Free Tax USA then populates this amount into lines 16 and 18 in the 8606 form.
Answers
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The amount converted is the the gross amount distributed minus the amount withheld for taxes.
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Hello DaveT and Tropical4:
You report the 18,250 which I understand is the amount you converted to your Roth IRA. In many situations of this type, the amount converted to a Roth IRA is consistent with the amount reported in Box 1 of the 1099-R; however, you converted a lesser amount of the total distribution. Consequently, report the actual amount you converted.
As you indicated in your post, the amount you converted—the 18,250—will appear on Form 8606, in Part II, lines 16 and 18. However, you should see the full amount of the distribution—the 25,000—reported on Form 1040, lines 4a and 4b.1
