I started receiving distributions from my IRAs in 2020. I am 67 so RMDs aren't an issue right now. Since I made nondeductible contributions to my IRA in the early 2000s I need to figure the non-taxable and taxable portions of my IRA Distributions. I reported these nondeductible contributions correctly on form 8606 way back then so I have all the information I need, no problem. The only dilemma I have is how to fill out Line 6 of form 8606 for 2020. I have Form 5498 for my traditional IRA and it's value is clear. I also have an IRA annuity that has annuitized and is a fixed income guaranteed lifetime income annuity (it started paying me in 2020). I used a lump sum from my other IRA to purchase it in 2014. It will never pay me more than my current monthly payments except for an annual 2% inflation adjustment. Do I include the annuitized IRA value on line 6 of Form 8606 in addition to my traditional IRA? And what value do I use? The amount I paid for it? The Fair Market Value has no bearing on what I'll be paid for the rest of my life, although the insurance company from which I purchased it says they will send a Form 5498 to the IRS for 2020.
