qbteachmt
Level 15

You are explaining it fine, but the terminology is being used incorrectly, and that will always be confusing. We're just reviewing that the situation really qualifies as it is being described.

"There were two contributions.  One in 2022 for 2022 ($6000)"

Then, by the explanation given, there was a delay in the Conversion. That means gain or loss is taken into consideration. That delay puts "backdoor" no longer in play. Now it is just conversion with Basis.

"and one in 2023 for 2023($6500)."

Again, the issue is how quickly was that converted.

"She said both were converted as backdoor IRAs."

She doesn't understand how to state it. Backdoor = immediately. The goal for "Backdoor" is, "I don't qualify for Roth directly, but I have put in nondeductible Traditional IRA funds and then, when they are converted to Roth, this is already post-tax money."

But it has to be an immediate conversion, to avoid the risk of gain or earnings.

"The one in 2023 is no problem contribution and conversion in 2023 ."

You don't know that unless you examine the carryover of the 2022 funds for Total. The separate years of contribution do not stand alone for purposes of the conversion; you might be thinking of how Roth conversions work. That delay, in a typical scenario, results in a Total Gross that is higher than Total Contributions. The difference is the taxable income. That means the total conversion is taxable pro rata.

"The question was for the 2022 contribution that was converted in 2023."

If I understood this correctly, there is one conversion that moved all funds. There is no separation of years, as I explained. Conversion amount compared to Account(s) Totals. Not by year.

"The 1099R showed $12,500 but I didn't think it would be a taxable 'event' "

Yes, this is the exact amount that was contributed. So, was there no gain or loss in that account? Did that leave any funds in that Trad IRA (or SEP or SIMPLE IRA) account? Was the money never invested, then? Having no change in value over time is really odd.

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