dmertz
Level 15

Retirement tax questions

"I'm trying to understand 'all of your traditional IRAs must be treated in aggregate for this purpose.' "

 

This is the case for determining the tax treatment of any regular distribution from a traditional IRA.  Your basis in nondeductible traditional IRA contributions applies to your traditional IRAs in aggregate, not to any particular one of your traditional IRAs no matter which traditional IRA received the actual deposit of your nondeductible contribution.  Line 6 of Form 8606 is required to show the combined year-end balance of all of your traditional IRAs, so to be able to convert all of your basis you must have a $0 total balance in traditional IRAs at year-end so that line 6 of Form 8606 will be zero.

 

With regard to IRS Notice 2014-54, I'll repeat what I said earlier.  This notice does not apply to distributions from IRAs.  An IRA is not a "qualified retirement plan" as the term is used in the tax code and in this notice.

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