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Deductions & credits

Your return will use Form 8606 to use the total value of IRAs at the beginning and end of the year and to allocate the distributions and contributions for 2020 to a portion of the "nondeductible IRA Basis" of the account. 

 

You will need to enter the information on Form 8606 in your return to match the 8606 from prior years to do the calculations.

 

LIne 6 of the Form 8606 says:

Enter the value of all your traditional, SEP, and SIMPLE IRAs as of December 31, 2020, plus any outstanding rollovers.  .There are some additional items to be included in this calculation that are not common.  Please refer to the line-by-line instructions for Form 8606 at the following link

 

Please refer to the Instructions for Form 8606 for additional questions at the following link:

IRS Instructions for Form 8606

 

It is designed so that the nondeductible IRA Basis from prior years is assigned to the balance of traditional IRAs for this and current years.

 

The annuitized IRA may be coded so that it will not be included in these calculations, depending on its 1099R details.

 

For additional information, please refer to IRS Publication 590-B:

 

IRS Publication 590-B, Distributions

 

[Edited 02/25/2021|12:54 PM PST]