Thank you for your assistance. You are correct that this is an IRA/SEP/SIMPLE account with some funds invested in an annuity. The IRS rules for an annuity indicate that the Simplified Method should be used when not all of the funds were pretax. However, after reading this section again, I believe that it does not apply to IRA funds, since it refers only to employee plans. Publication 590-B specifically says that annuities within an IRA should use form 8606. So, I believe that your guidance is correct.
Thanks again.
