Form 8606 does not address that type of Distribution becuase that type of transaction is not allowed. When you take a distribution from an IRA with both pretax and after-tax (non-deductible) funds, the distribution is part pretax and part after-tax. Let's say you have an IRA with a total balance of $100,000, and your basis in the IRA is $19,500. Any distribution you take from the IRA will have taxable component (80.5%) and a non-taxable (19.5%) component. If you take a distribution of $7,000 to meet your RMD, then $5,635 will be taxable and $1,365 will be non-taxable. You cannot take a distribution that is only after-tax (non-deductible). If you take another distribution of $19,500, then $3,802 will be non-taxable and $15,697 will be taxable.
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