With apologies for a lengthy question - asking for help.
I have a traditional non-deductible IRA, to which I contribute regularly. I receive Form 5498 for this IRA every year; I haven’t yet received this form for Tax Year 2024 (it will not be sent until May 2025), but I know the IRA value at the end of 2024 and the cost basis (essentially, the totality of my contributions – none of them were ever deducted due to high income).
I also have a Rollover IRA which exists for the sole purpose of rolling over my 401(k) plans when I change jobs. In 2024, I rolled over some of my 401(k) into this Rollover IRA (direct rollover, not a taxable event). I have NEVER received a Form 5498 for this account, but I know its end of year value, and assume that its cost basis is $0 since it has only rollover finds + reinvested dividends.
In 2024 I created a Roth IRA account and converted some of the Rollover IRA to Roth. Now I’m working on Form 8606 in TurboTax, and am not sure how to answer several questions:
- It asks me what is my IRA cost basis. Should I enter $0 (which I think is the cost basis of the Rollover IRA), or should enter the aggregate of cost basis of the Traditional IRA and Rollover IRA? Am I correct that the cost basis of a Rollover IRA is $0 assuming no other contributions were made – just direct rollovers from 401(k) plans and reinvestments of dividends?
- It asks me what is the end of year value of the IRA account. Should I enter the value of just the Rollover IRA, or aggregate value of both IRA accounts?
- How do I make TurboTax aware that I have two IRA accounts? All these years I was receiving just one Form 5498 (for Traditional IRA) and this is what I was entering in TurboTax in Deductions section.
Thank you very much for your help!
