qbteachmt
Level 15

"not sure where the line 7 in pension area is"

Try these articles for reference:

https://proconnect.intuit.com/support/en-us/help-article/retirement-tax-credits-deductions/entering-...

https://proconnect.intuit.com/support/en-us/help-article/retirement-tax-credits-deductions/report-co...

"Having similar issue"

Based on what you told us, your taxpayer has a taxable conversion; not a backdoor conversion.

"Never had traditional Ira before the conversion happened- same month and year"

By definition, a conversion (even if backdoor) starts from funds in a Traditional. The issue comes from whether there is any "never taxed" amount in that Trad (Trad IRA, SEP IRA, SIMPLE IRA are aggregated). If so, you have a pro rata tax condition that has to be computed.

"first time doing backdoor roth and line 8 on 8606 is blank"

Backdoor Roth is when you have only nondeducted amounts, only as basis, in the pre-tax account type. The conversion is not taxable because those are post-tax funds, already. Any amounts (previous or current year deductible contributions, any earnings) that are still tax deferred create a pro rata conversion. That's not really a Backdoor. It's simply a conversion. That's why line 8 would have something in it. That section is to compute the percentage Basis to full value, and then that percentage gets applied to the conversion, to deduct previously taxed percentage and end with the taxable conversion percentage.

 

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