Hello,
As I was reviewing the last several years of my income tax returns generated in TurboTax, I noticed that the IRA total cost basis amount on the Form 8606 is always reset to $0 even though every year, I have always made contributions to my IRA and never made any withdrawals .
Is this total IRA basis of $0 right??
I have been trying to take a more active role in understanding taxes, and based on what I have learned recently, I think the IRA total cost basis amount is cumulative, or a running counter.
For the sake of example, let's say I opened an IRA in Tax Year 1, contributed to IRA $10 (that same year, Tax Year 1), then $20 (in Tax Year 2), then $30 (in Tax Year 3), then most recently $40 (in Tax Year 4). In filling out TurboTax, during March (of Year 5), I would then expect it to generate (on Line 2 of Form 8606): IRA total basis = $60
At least, that's what I think it should be-- I guess when I was doing my taxes in TurboTax previously, I may not fully have understood what total IRA cost basis meant.
Or have I still got this all wrong?
Thanks in advance!
I have a follow-up question. If it turns out I need to amend my Form 8606's total IRA cost basis, must I amend it for *EVERY* prior tax year as well?
