- Mark as New
- Bookmark
- Subscribe
- Subscribe to RSS Feed
- Permalink
- Report Inappropriate Content
Retirement tax questions
I am assuming that you did not have any non-deductible basis in the Traditional IRA that would make the conversion only partly taxable and the 8606 would apply.
But, yes, to answer the question, if the Traditional IRA contained any after-tax "basis" money then the taxable amount must be calculated on a 8606 form lines 6-15 and the 1099-R box 1 amount would go on line 4a and the 8606 taxable amount which would be less, on line 4b, but if the box 1 amount and the taxable amount is the same then line 4a is blank. (That is the reason that box 2b - not determined - on the 1099-R is checked, to allow for the possibility of preexisting basis in the IRA that makes the taxable amount less than the box 2a amount.)
This is why is is difficult to give a "one size fits all" answer to 4a/4b questions since there are many variables.
But, yes, to answer the question, if the Traditional IRA contained any after-tax "basis" money then the taxable amount must be calculated on a 8606 form lines 6-15 and the 1099-R box 1 amount would go on line 4a and the 8606 taxable amount which would be less, on line 4b, but if the box 1 amount and the taxable amount is the same then line 4a is blank. (That is the reason that box 2b - not determined - on the 1099-R is checked, to allow for the possibility of preexisting basis in the IRA that makes the taxable amount less than the box 2a amount.)
This is why is is difficult to give a "one size fits all" answer to 4a/4b questions since there are many variables.
**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.**
‎June 1, 2019
5:09 PM