form 8606 and roth conversion In the past 3 years, my wife has been making non-deductible traditional IRA contributions (our income is too high for the deductible contribution) and converting it to Roth promptly. As a result, we receive 1099-R and we file 8606. It's been pretty straightforward so far because the total basis is $5,500 (max annual contribution) which would then get converted to Roth. And we didn't have any taxable amount from the distribution. We did this because we thought that we didn't have any additional traditional IRA other than these recent contributions.
In 2017, however, we discovered that my wife had a long-forgotten traditional IRA account (the brokerage notified us), and I think this complicates things a little. This was supposedly a deductible contribution.
Its value as of 12/31/2017 was $1,736, and I think this needs to be reflected in line 6 of form 8606, and I suspect that this might lead to a taxable amount from this distribution in line 15c. Is that the right understanding? If I follow that instructions, it sounds like the taxable amount comes out to be around $1,320. I'd like to confirm that is the right result.
FWIW, I tried to do this with TurboTax, but somehow TurboTax does not include this in form 8606... |