Rbynaker, you are under paid. Backdoor roths are still available for 2018, and I have a client next week that will use it, again many thanks to Rbynaker, as he saved me a lot of frustration  

Thanks to @rbynaker . @itonewbie , @pdlang55 .  I haven't had anyone do one of these since a client who already had over $1,000,000 in his IRA and had tried to do one of these (about 10 years ago).  We stopped the IRA contribution in time to prevent a mess!  

THank you Rbynaker --- this helps --- best regards ---

This is the mechanics assuming the entire conversion is not taxable but there are limited circumstances as explained below where that might be the case.  Shouldn't we also address the tax rules on that?

YW.  The IRA stuff in ProSeries is pretty quirky.  I think there's probably a way they could streamline it some but I'm sure it's not a high priority.

Turns out I didn't need to enter the $0 ending FMV.  Personally, if I were programming it, that would be a requirement for any conversion with basis.  PS assumes $0 if you leave it blank, I agree with itonewbie, that's a really bad thing to assume.  If you do put a number in there (it's on the IRA Info Wks), it does correctly allocate basis.  But IMO, a non-entry should be an incomplete calculation.

Rick

rbynaker - Can you please advise on how I can view your screenshots?

Sorry, they didn't survive the "upgrade" to the new forum.

Does your client have money in the IRA in addition to the amount you are converting?

If that is the case, this is not necessarily a story with a happy ending.

No other IRA money  --- Made contribution to 2018 IRA, then immediately withdrew the money and converted the distribution to a Roth in 2018

The Proseries in 2017 had a box that could be checked for Roth conversions - but in 2018 does not -

Keep going down the page to see if B5 or B6 works.

This worked.  Helpful input.

Facts: 1099R for 2018 has 5500 in Box 1, 5500 in 2A, Distribution code is 2, scrolling down the page, 5500 appears in box B4, then check the box in B5 to show full amount in B4 converted to Roth, but this still shows up as fully taxable on 1040.  In 2017, there were boxes in C: Recharacterization, to indicate that the whole amount was recharacterized, however, there is no recharacterization section under a C category in 2018, the form goes from B to D

I'm with you!  Everything I tried left the $5500 as taxable.  

I think I found the answer - There are no more re-characterizations of IRA Distributions in 2018 to a Roth.  The new Tax Act killed the "Back-door" Roth for any distribution from a IRA in 2018 and beyond that is converted into a Roth.  You must now treat any distribution that is converted as taxable income.

pdlang55, TCJA did not shut down back-door Roth IRA, only recharacterization (i.e. unwinding) of conversion (see §408A(d)(6)(B)(iii)).  Roth IRA conversion has always been taxable based on the normal rules except the 10% early distribution penalty does not apply (see §408A(d)(3)).

I agree with itonewbie.  I have one of these at the top of my stack that I'm going to work on Sunday.  Just shooting from the hip here, you have to enter the contribution as a non-deductible IRA, then enter $0 as FMV of IRAs on 12/31/18 (and the B5 that poolcleaner mentioned).  It should show in-and-out on the 8606, but I don't have the software in front of me.

I think your 8606s have probably been wrong the way you were doing it in the past.  Recharacterization and conversion are not the same thing.

Rick

Even when you do that, the event shows up taxable.  Go back to the 2017 software and look how it is treated.  It is treated completely differently.  The 2018 software takes out a step.  

@pdlang55 There is nothing wrong with the technical response to your comment.  You shouldn't expect the distribution to be nontaxable.

Is Box 2b for "Taxable amount not determined" checked?  Or was it a total distribution?

Does the taxpayer have any basis in the IRA being converted?  If so, have you determined how much of the distribution is cost basis with the balance being taxable?

In years prior to 2018, a taxpayer could make a contribution to an IRA, the next day take a distribution of that contribution, then roll it into a Roth IRA.  This has been called a "Back Door Roth" as it could only be done through Proseries when you checked a box at the bottom of the 1099-R that allowed the full distribution to be re-characterized.
However, that step (C-1 through C-3) is now missing from the 2018 software.  Take a look.
It appears that this ability to contribute to a Roth through the "Back-door" method previously allowed has disappeared with the new tax act.
The 1099-R in 2018 shows the distribution as a total distribution with the taxable status as undetermined.
I have tried every way to get the distribution to show up as non-taxable but I can't.  I have tried every way suggested by those on this community

There is no tax free conversion to Roth IRA.  The backdoor only lets taxpayers get around the AGI limitation.

Just about the only time when the distribution is nontaxable is if your client opened the one and only brand new traditional IRA and immediately convert that to Roth, assuming there is no gain or loss.

You may like to refer to §1.408A-4 Q-7, which refers to §408(d)(1) and (2) for the rules on income inclusion.

It's not that uncommon.  Especially now that a lot of 401(k) plans will allow you to roll IRA money into them.  Maybe it depends on your client base.  I think Google HR must teach a class on this stuff, a lot of my Googlers do this in addition to in-plan conversions from after-tax contributions to Roth.  It's a pretty big loophole for folks who know how to use it.

Direct rollover of designated Roth to Roth IRA is excepted from income inclusion pursuant to §408A(d)(3)(B).  Rollover from 401(k) and 60-day rollover, on the other hand, will still be taxed for distributions that do not represent return of basis.

I think the problem is that it is not uncommon for the tax treatment of backdoor Roth IRA, in terms of the rules on prorata income inclusion and IRA aggregation, to be misunderstood.  When the 1099-R has the "Taxable amount not determined" box checked, it is easy to presume that the taxpayer can elect to convert only previously nondeductible contributions, when they really cannot.