IRS Form 8606, help!

So we did a Roth conversion in 2021.  Schwab insisted on withholding 10% in tax, so X came out of the trad IRA and X-10% went into the Roth.  We need to fill out part 2 of this form.  There are only 3 questions but I don’t understand how they should be answered.  If anyone can help I’d appreciate it.
Line 16 asks for  ‘net amount converted to Roth’.  It seems to me this is X-10%, the amount that went into the Roth.  Then line 17 is basis, which is zero.
Line 18 is the line 16 minus line 17 so again X-10%.  So that’s all great, except then you take the result and put it on line 4b of the 1040, which would then seem to result in calculating a taxable income that only reflects 90%X when I know that 100%X is taxable!  This makes no sense. Help!

So we did a Roth conversion in 2021.  Schwab insisted on withholding 10% in tax, so X came out of the trad IRA and X-10% went into the Roth.  We need to fill out part 2 of this form.  There are only 3 questions but I don’t understand how they should be answered.  If anyone can help I’d appreciate it.
Line 16 asks for  ‘net amount converted to Roth’.  It seems to me this is X-10%, the amount that went into the Roth.  Then line 17 is basis, which is zero.
Line 18 is the line 16 minus line 17 so again X-10%.  So that’s all great, except then you take the result and put it on line 4b of the 1040, which would then seem to result in calculating a taxable income that only reflects 90%X when I know that 100%X is taxable!  This makes no sense. Help!

First thing - sorry to hear that Schwab made the mandatory withholding, I have always managed to pay the taxes on Roth conversions using other money, not from the IRA.

Form 8606 is only used when you have non-deductible contributions in your IRAs but you say you have a zero basis therefore you don't to complete form 8606 since this form to calculate how much of your withdrawal is taxable and track your basis going forward. On the 8606 the net amount refers to all of the IRA/401k money you withdrew since you could have multiple IRAs.

If you never made non-deductible contributions and have zero basis then you don't need form 8606.

The total amount of your IRA distribution should be record on line 4a of your 1040, and with a zero basis then the taxable amount on line 4b should be the same as 4a.

Thanks Durhamlad, that makes total sense about what ‘net’ is supposed to mean.  Sadly it’s not really explained anywhere. My only query with what you’ve said is that Part II specifically says it needs filling out for any trad to Roth conversion, so I think we put X on line 16 and 18 and 1040 4b and move on.

As to the tax,  yes we would’ve liked to pay it all from other funds,  but once Schwab did what they did I don’t think we could ‘top up’  the Roth contribution.  So of course that 10% they withheld will be a taxable distribution in the UK :-(.  Since we’ll be doing this again this year as we draw ever closer towards RMDs and the 40% tax bracket (and the bloody pound isn’t helping either), I’d love to hear any solutions to this other than lying about our address☹️

Thanks Durhamlad, that makes total sense about what ‘net’ is supposed to mean.  Sadly it’s not really explained anywhere. My only query with what you’ve said is that Part II specifically says it needs filling out for any trad to Roth conversion, so I think we put X on line 16 and 18 and 1040 4b and move on.

As to the tax,  yes we would’ve liked to pay it all from other funds,  but once Schwab did what they did I don’t think we could ‘top up’  the Roth contribution.  So of course that 10% they withheld will be a taxable distribution in the UK :-(.  Since we’ll be doing this again this year as we draw ever closer towards RMDs and the 40% tax bracket (and the bloody pound isn’t helping either), I’d love to hear any solutions to this other than lying about our address☹️

I have a similar issue these days (I finished converting all my IRA money to Roth a few years ago) in that when I make a Roth distribution Vanguard insist they have to withhold 10% even though it will be tax free. This is simply because  I have an overseas address. I used to use our daughter’s address in LA as a correspondence address (Vanguard allows a UK street address and a US correspondence address) but the the State of California came after me for taxes as they saw the 1099Rs, so I removed her address. She is moving back to England next month, hopefully, and is going to set up a US correspondence address to forward mail etc which she says I will be able to use as well so that should solve the mandatory withholding for me.