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Wait a second! I thought that was exactly the point of this exercise. To keep tracking the cost basis into future years so you can effectively use your market losses instead of just throwing them in the waste bin.

I think you misunderstood me. My point is NOT to make a partial conversion when the IRA is worth less than it's basis. You are gaining nothing by converting.

As for remembering, your previous Form 8606 records your running cost basis - you just have to pull that tax return to "remember" how much it was. And that's assuming your broker doesn't remember for you.

In reverse order, your broker CANNOT remember for you. You could have traditional IRA accounts at a different broker. Any one broker does not know what activity is happening in those other accounts. Also, your broker does not know whether your IRA contribution is deductible or non-deductible. They are not privy to that information. Yes, the information is on Form 8606. So how often do we see people here asking questions but who don't know if they've ever made a non-deductible contribution? Will you actually remember what year has the most recently filed 8606? Will you remember that you even made a non-deductible contribution?

Finally zeroing out the TIRA while it has a cost basis loses the cost basis.

Yes. I'm the one in the thread who definitively answered that question.

And why keep the funds in the account and wait to convert? Really?! Instead of converting now? I would have thought that was obvious. The more money you leave in the account, the smaller any market increase has to be to use up your excess cost basis.

Why wait long enough to accumulate a loss at all? If you're doing a backdoor Roth contribution, make the necessary conversion as soon as practical so there are no issues about gains or losses in the traditional IRA. But that's not the fact pattern we were given.

By leaving a small amount in the IRA ($100 vs. a $300 remaining basis in aj's example), you have to have your IRA triple in value to use up the remaining basis. By not converting, you merely need a 25% gain. (From $800 to $1000.) That's going to happen sooner and get all of the funds to their final destination (the Roth IRA) quicker.

So tell me again, why should you just convert it all and not worry about preserving the cost basis?

Go back and read my post again. I never argued for that outcome.

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