Roth conversions that include non-deductible IRA contributions

Question

Spouse has a single traditional IRA account into which was made a non-deductible contribution one year (and the appropriate form filed with our taxes). We understand the pro rata rule for partial distributions which could be a nuisance to track in later years, but if we were to convert the full IRA this year is it a simple matter of just paying tax on the difference between the IRA total (consisting of deductible contributions and earnings) less the non-deductible contribution? I know there are other considerations to Roth conversions, but this is the first time we're doing a conversion and just want to be sure of not overlooking some possibly obscure rule related to this specific issue. Thanks.

user102008 · Accepted Answer

Yes, that is correct. The taxable amount will be the amount of the conversion minus the amount of non-deductible contributions (the basis in the Traditional IRA). In the year of the conversion, since you converted all of your Traditional IRAs, you will fill out Form 8606 Part II:
16. the amount of the conversion
17. the amount of nondeductible contributions
18. the amount of the conversion - the amount of nondeductible contributions

You include line 18 as the taxable amount from the conversion on your Form 1040.

Roth conversions that include non-deductible IRA contributions

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