My recollection is turbotax used to make this basis disappear and then a couple years ago changed it so it no longer disappears.
Having basis left over when your trad IRA drops in value before conversion is exactly the result the instructions to form 8606 give you. Some tax lawyers who are smarter than me say that you should only get to keep the basis if you leave $1 in the account but lose it if you leave nothing in the account (because, I think, there is nothing the basis belongs to). However I think it is perfectly reasonable for taxpayers to follow the instructions (and tax software).
As someone else said, the basis will be used up if you ever convert a traditional IRA with unrecognized gains, or you could even just act as if it never existed.
Having basis left over when your trad IRA drops in value before conversion is exactly the result the instructions to form 8606 give you. Some tax lawyers who are smarter than me say that you should only get to keep the basis if you leave $1 in the account but lose it if you leave nothing in the account (because, I think, there is nothing the basis belongs to). However I think it is perfectly reasonable for taxpayers to follow the instructions (and tax software).
As someone else said, the basis will be used up if you ever convert a traditional IRA with unrecognized gains, or you could even just act as if it never existed.
Statistics: Posted by Iorek — Mon Jan 26, 2026 11:52 am — Replies 6 — Views 200