Allocation · 2025 and 2026
Backdoor Roth Case Studies: Six Taxpayer Scenarios
Published by Moss Ladder · Updated October 17, 2026 · Editorial policy
Executive summary
These six invented cases show how the same ordinary allocation responds to different facts. Each table is calculated by the site's unchanged engine, with Form 8606 line 10 formatted only for display. The cases assume documented basis, eligible ordinary transactions and no special adjustment. For 2026, published contribution limits are paired with the 2025 form structure as a planning model.
Educational guidance for ordinary scenarios. Check the official form's year and filing branches and obtain advice for your actual records.
Try the related planning toolCase 1: a clean $7,500 2026 backdoor Roth
Assume an eligible owner under age 50 has compensation sufficient for a $7,500 nondeductible traditional IRA contribution for 2026. The owner makes that contribution before the conversion, converts all $7,500 and has no other applicable IRA balance at December 31. There is no prior basis, other distribution, outstanding rollover or special transaction. Line 1 is $7,500 and line 4 is zero because the contribution was not paid after the end of its designated tax year. Available basis is therefore $7,500.
The denominator is the $7,500 conversion, so line 10 reaches 1.000. All $7,500 is tax free and no basis remains. This does not remove the requirement to report the contribution and conversion appropriately. The contribution still uses the annual regular IRA limit, and the custodian's Form 1099-R may not independently establish its tax-free amount. Use the contribution and conversion confirmations, check the year-end account inventory and retain Form 8606 with the tax return.
Case 1 line table
This invented example assumes one taxpayer, documented basis, eligible ordinary transactions, no special repayment and no tax withholding. Dollar amounts are planning values. Use the official form's filing branches; a displayed line is not automatically a required entry on a filed return. The 2026 examples apply published 2026 contribution limits with the 2025 allocation structure.
| Form 8606 line | Modeled amount |
|---|---|
| 1 | $7,500.00 |
| 2 | $0.00 |
| 3 | $7,500.00 |
| 4 | $0.00 |
| 5 | $7,500.00 |
| 6 | $0.00 |
| 7 | $0.00 |
| 8 | $7,500.00 |
| 9 | $7,500.00 |
| 10 | 1.000 |
| 11 | $7,500.00 |
| 12 | $0.00 |
| 13 | $7,500.00 |
| 14 | $0.00 |
| 16 | $7,500.00 |
| 17 | $7,500.00 |
| 18 | $0.00 |
| 15a | $0.00 |
| 15b | $0.00 |
| 15c | $0.00 |
Case 2: $45 of interest before the conversion
Keep the first case's eligible $7,500 contribution, but assume the IRA earns $45 before the entire $7,545 balance is converted. Nothing remains at December 31 and there are no other changes. Available basis remains $7,500 rather than increasing with the interest. The conversion pool is $7,545. The ordinary allocation recovers all $7,500 contribution basis, leaving $45 taxable conversion and zero remaining basis. Earnings inside a traditional IRA do not become nondeductible contribution basis simply because the account was used for a backdoor Roth.
A conversion of $7,545 does not itself exceed the $7,500 regular contribution cap, because conversion and contribution are different events. Do not enter the gain as a second contribution to force the conversion tax to zero. Also check for residual interest paid after the conversion, since a small balance left behind or converted later is another fact to reconcile. The marginal-rate tax estimate on $45 is separate from the taxable income itself, and a preparer applies the return's actual rounding and reporting conventions.
Case 2 line table
This invented example assumes one taxpayer, documented basis, eligible ordinary transactions, no special repayment and no tax withholding. Dollar amounts are planning values. Use the official form's filing branches; a displayed line is not automatically a required entry on a filed return. The 2026 examples apply published 2026 contribution limits with the 2025 allocation structure.
| Form 8606 line | Modeled amount |
|---|---|
| 1 | $7,500.00 |
| 2 | $0.00 |
| 3 | $7,500.00 |
| 4 | $0.00 |
| 5 | $7,500.00 |
| 6 | $0.00 |
| 7 | $0.00 |
| 8 | $7,545.00 |
| 9 | $7,545.00 |
| 10 | 0.994036 |
| 11 | $7,500.00 |
| 12 | $0.00 |
| 13 | $7,500.00 |
| 14 | $0.00 |
| 16 | $7,545.00 |
| 17 | $7,500.00 |
| 18 | $45.00 |
| 15a | $0.00 |
| 15b | $0.00 |
| 15c | $0.00 |
Case 3: a $63,000 rollover IRA remains
Assume $7,000 documented prior basis, a $7,000 conversion and $63,000 remaining in a pre-tax rollover IRA at year end. There are no new nondeductible contributions, other relevant distributions or outstanding rollovers. The combined denominator is $70,000. The ratio is 10%, so $700 of the conversion is tax free and $6,300 is taxable. The owner carries $6,300 basis forward. Keeping the rollover IRA at a different brokerage does not change the ordinary aggregation rule.
The $63,000 entered as year-end value is the actual amount left after the modeled conversion, not a pre-conversion total that must be reduced again. This case also illustrates a timing trap if the rollover IRA was funded after an early-year conversion: the annual December 31 value still matters. A joint return does not add the spouse's IRAs to this owner's calculation. Use the simulator to change only year-end value and compare how that one assumption changes the allocation.
Case 3 line table
This invented example assumes one taxpayer, documented basis, eligible ordinary transactions, no special repayment and no tax withholding. Dollar amounts are planning values. Use the official form's filing branches; a displayed line is not automatically a required entry on a filed return. The 2026 examples apply published 2026 contribution limits with the 2025 allocation structure.
| Form 8606 line | Modeled amount |
|---|---|
| 1 | $0.00 |
| 2 | $7,000.00 |
| 3 | $7,000.00 |
| 4 | $0.00 |
| 5 | $7,000.00 |
| 6 | $63,000.00 |
| 7 | $0.00 |
| 8 | $7,000.00 |
| 9 | $70,000.00 |
| 10 | 0.100000 |
| 11 | $700.00 |
| 12 | $0.00 |
| 13 | $700.00 |
| 14 | $6,300.00 |
| 16 | $7,000.00 |
| 17 | $700.00 |
| 18 | $6,300.00 |
| 15a | $0.00 |
| 15b | $0.00 |
| 15c | $0.00 |
Case 4: the eligible $63,000 is rolled into a plan
Change case 3 by assuming a receiving employer plan accepts an eligible $63,000 pre-tax IRA rollover and the transaction has the correct year-end treatment. The $7,000 documented basis is not rolled into the plan. With a $7,000 conversion and zero applicable IRA value left at December 31, the conversion pool is $7,000. The available basis covers it fully, giving zero taxable conversion and zero remaining basis under the ordinary assumptions.
The tax result is a conditional projection, not approval of the transfer. Plan acceptance, taxable-only rollover eligibility, SIMPLE restrictions, required distributions and actual completion must be checked. A Solo 401(k) additionally requires appropriate business and plan eligibility. Do not assume that moving all money from a mixed-basis IRA into a plan is permitted or that a pending request proves a zero year-end balance. Retain the administrator's acceptance and transaction evidence with the conversion-year workpaper.
Case 4 post-rollover line table
This invented example assumes one taxpayer, documented basis, eligible ordinary transactions, no special repayment and no tax withholding. Dollar amounts are planning values. Use the official form's filing branches; a displayed line is not automatically a required entry on a filed return. The 2026 examples apply published 2026 contribution limits with the 2025 allocation structure.
| Form 8606 line | Modeled amount |
|---|---|
| 1 | $0.00 |
| 2 | $7,000.00 |
| 3 | $7,000.00 |
| 4 | $0.00 |
| 5 | $7,000.00 |
| 6 | $0.00 |
| 7 | $0.00 |
| 8 | $7,000.00 |
| 9 | $7,000.00 |
| 10 | 1.000 |
| 11 | $7,000.00 |
| 12 | $0.00 |
| 13 | $7,000.00 |
| 14 | $0.00 |
| 16 | $7,000.00 |
| 17 | $7,000.00 |
| 18 | $0.00 |
| 15a | $0.00 |
| 15b | $0.00 |
| 15c | $0.00 |
Case 5: a 2025 contribution paid in February 2026
Assume a $7,000 nondeductible contribution paid in February 2026 and properly designated for 2025. No distribution or conversion occurred in 2025. The 2025 form records the contribution and carries its basis from line 3 to line 14 under the no-distribution branch. In 2026, the owner converts the $7,000, makes no new regular IRA contribution and has no applicable year-end IRA value or other relevant transaction. The 2026 calculation starts with $7,000 prior basis.
The conversion is tax free under these facts, with no basis left. The same contribution must not also be entered as a new 2026 contribution. If a conversion had instead occurred before December 31, 2025, line 4's late-contribution adjustment could produce a different 2025 result. Keep both the designated contribution year and actual payment date, and distinguish them from the calendar-year conversion confirmation. Two returns can describe different steps involving the same dollars without creating two separate amounts of basis.
Case 5 conversion-year line table
This invented example assumes one taxpayer, documented basis, eligible ordinary transactions, no special repayment and no tax withholding. Dollar amounts are planning values. Use the official form's filing branches; a displayed line is not automatically a required entry on a filed return. The 2026 examples apply published 2026 contribution limits with the 2025 allocation structure.
| Form 8606 line | Modeled amount |
|---|---|
| 1 | $0.00 |
| 2 | $7,000.00 |
| 3 | $7,000.00 |
| 4 | $0.00 |
| 5 | $7,000.00 |
| 6 | $0.00 |
| 7 | $0.00 |
| 8 | $7,000.00 |
| 9 | $7,000.00 |
| 10 | 1.000 |
| 11 | $7,000.00 |
| 12 | $0.00 |
| 13 | $7,000.00 |
| 14 | $0.00 |
| 16 | $7,000.00 |
| 17 | $7,000.00 |
| 18 | $0.00 |
| 15a | $0.00 |
| 15b | $0.00 |
| 15c | $0.00 |
Case 6: joint filers with different IRA inventories
Assume each spouse has $7,000 prior basis and converts $7,000. Spouse A has no applicable IRA value at year end, while Spouse B has a $63,000 traditional SEP IRA balance. There are no other transactions or adjustments. Spouse A's ordinary conversion is fully tax free. Spouse B's denominator is $70,000, producing $700 tax free, $6,300 taxable and $6,300 remaining basis. Their joint filing status does not merge these two basis pools or allow one spouse's empty IRA to offset the other's SEP balance.
Each spouse who must file prepares an individual Form 8606, while the return combines reportable income under the joint-return rules. A household-level tax estimate can therefore involve two separate allocation calculations and one broader income-tax projection. Keep separate ledgers, confirmations and year-end statements for each owner. The single-owner calculator should be run once for each spouse rather than with combined balances. Use a qualified preparer for the household return and any issues beyond these ordinary assumptions.
Case 6: spouse without pre-tax IRA assets
This invented example assumes one taxpayer, documented basis, eligible ordinary transactions, no special repayment and no tax withholding. Dollar amounts are planning values. Use the official form's filing branches; a displayed line is not automatically a required entry on a filed return. The 2026 examples apply published 2026 contribution limits with the 2025 allocation structure.
| Form 8606 line | Modeled amount |
|---|---|
| 1 | $7,000.00 |
| 2 | $0.00 |
| 3 | $7,000.00 |
| 4 | $0.00 |
| 5 | $7,000.00 |
| 6 | $0.00 |
| 7 | $0.00 |
| 8 | $7,000.00 |
| 9 | $7,000.00 |
| 10 | 1.000 |
| 11 | $7,000.00 |
| 12 | $0.00 |
| 13 | $7,000.00 |
| 14 | $0.00 |
| 16 | $7,000.00 |
| 17 | $7,000.00 |
| 18 | $0.00 |
| 15a | $0.00 |
| 15b | $0.00 |
| 15c | $0.00 |
Case 6: spouse with the traditional SEP IRA
This invented example assumes one taxpayer, documented basis, eligible ordinary transactions, no special repayment and no tax withholding. Dollar amounts are planning values. Use the official form's filing branches; a displayed line is not automatically a required entry on a filed return. The 2026 examples apply published 2026 contribution limits with the 2025 allocation structure.
| Form 8606 line | Modeled amount |
|---|---|
| 1 | $0.00 |
| 2 | $7,000.00 |
| 3 | $7,000.00 |
| 4 | $0.00 |
| 5 | $7,000.00 |
| 6 | $63,000.00 |
| 7 | $0.00 |
| 8 | $7,000.00 |
| 9 | $70,000.00 |
| 10 | 0.100000 |
| 11 | $700.00 |
| 12 | $0.00 |
| 13 | $700.00 |
| 14 | $6,300.00 |
| 16 | $7,000.00 |
| 17 | $700.00 |
| 18 | $6,300.00 |
| 15a | $0.00 |
| 15b | $0.00 |
| 15c | $0.00 |
About the publisher: Moss Ladder
Moss Ladder owns and publishes RothProRata.com, an independent educational website about IRA basis, Roth conversions and Form 8606. The guides connect official sources with invented examples, document checklists and browser-local planning tools.
AI-assisted tools help prepare explanations and software. Numerical allocation examples state their assumptions and are checked with automated calculations. These engineering checks do not constitute independent CPA or Enrolled Agent review, and no professional tax credential is claimed.
Official sources
Source year and transaction type matter. Citations support the explanation; they do not imply government endorsement.
- U.S. Code (2024 edition): IRC § 408(d)(2) aggregation and § 408(d)(3) rollovers
- IRS: 2025 Form 8606, Parts I and II
- IRS: 2025 Form 8606 instructions (basis, year-end values and conversions)
- IRS: Publication 590-A (2025), contributions and rollovers
- IRS: Publication 590-B (2025), distributions and Roth five-year rules