I have used the back door Roth Plan for several years. I made a $5500 nondeductible traditional IRA contribution in March of 2019 for the 2018 year and immediately converted it to a Roth IRA. I have a 2019 Form 1099R for $5500. Normally form 8606 produces results that you would expect -0- taxable income on the conversion since I have $5500 nondeductible basis. However in December of 2019 I changed jobs and rolled over $5000 of my 401K to my IRA account. So my IRA Fair Market value on 12/31/19 is $5,000.
Should form 8606 be producing taxable income on the earlier Roth conversion when at that time the conversion was made 100% of my value was nondeductible basis ?
I plan to convert this amount to a Roth IRA in 2020 so this wont be a problem moving forward.