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Say an individual maxed out their IRA contribution for 10 years running, and each year was not able to take a deduction on their IRA contributions because their income was above the limit.

Could that person then do a Roth conversion and only pay taxes on the gains (since all principal contributions were non-deductible)?

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    If those were the only contributions, yes. (Not 20 years of deductible contributions then '10 years running' of nondeductible.) Dupe money.stackexchange.com/questions/131902/… . Nov 3, 2021 at 2:06
  • Did you file Form 8606 each year telling the IRS that you made nondeductible contributions to your Traditional IRA for that year? Note that your IRA custodian has no idea as to whether you took a deduction for the contributions or not; the custodian simply received the money and invested it as directed by you. In the absence of Forms 8606, the IRS position is that all money taken out of the Traditional IRA is taxable, and you will pay taxes all over again on the contributions when you do the Roth conversion. Nov 3, 2021 at 15:42

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