Please help with form 8606
I am confused about how to fill out form 8606 correctly. I make a $5500 non-deductible contribution to traditional IRA each year, then immediately convert/ "backdoor rollover" full amount to Roth IRA.
Line 1 on the form would be $5500.
For line 2 total basis in IRA, is that "0" since previous IRA contributions were immediately converted to Roth IRA or is it $11000 if $5500 non-deductible contribution were made prior 2 years? Does the total basis in traditional IRA increase by $5500 each year for every year I make a non-deductible contribution to traditional IRA in that amount, even though the actual balance is "0" since the full amount were immediately converted to Roth IRA? I hope the question makes sense.
Thanks so much for helping.