@Mike7388 wrote:
I have a follow-up question on your response. You specifically mention that the aggregate of Traditional IRA's, SEP and Simple accounts should be added together. I want to confirm whether or not that aggregate balance should also include "Roll-over IRA's" (rolled-over from a Company 401k Plan). Also, when is the aggregate basis calculation performed as-of; December 31'st of the year the conversion (which would therefore require adding-back the conversion amount into the denominator), or as of December 31st of the year prior to the conversion? Thanks.
For the purpose of determine the year end value of all Traditional IRA, SEP and SIMPLE IRA's to determine the taxable amount on the 8606 form then yes, ALL existing such IRA's must be included reguardless of where the funding came form or if it was a rollover or not.
(BTW some taxpayers attempt to do a so called "backdoor Roth" and overlook a prior 401(k) rollover IRA which will make most of the backdoor conversion taxable because the year end value will be high rather then zero.)
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
