puravidapto
Level 7
06-25-2021
11:15 AM
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"From Pub 590-B I believe your basis is the full 85,500 - contributions and rollovers" - it is true for computing taxable amounts. The amount subject to tax and to penalty are computed separately, for example, you do not pay tax for conversion within 5 years, but you do pay penalty, please see form 8606 Part III.
The question is: non-qualified distribution on conversion outside of 5 year window is or is not subject to penalty? I am not clear from reading the Pub 590-B. If not, how should we input the data in the software to fill out the form 8606 Part III, as there is no place to enter the conversion outside of 5 years?
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Click this link to vote. Like many good things in life, we have to fight for them.