For a Traditional IRA your cost basis is the amount that you invest into your IRA that was with "after tax" money. In other words if you ever had contributions that you were not allowed to deduct.
- If you had that situation then the most recent filed Form 8606 will have your cost basis of all IRAs.
The Form 8606 will be completed in the years of distribution to calculate the tax free portion (cost basis) allowed for each year of withdrawal. You can NEVER withdraw ONLY the nondeductible part - it must be prorated over the entire value of ALL Traditional IRA accounts. (For tax purposed you only have ONE Traditional IRA which can be split between as many different accounts as you want, but for tax purposes they are all added together). As long as there is any money in the IRA, there will be some cost basis.
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For example using rough figures: if you had $60K of nondeductible contributions in an IRA with a total value of $600K (10:1 ratio), then when you take a $60K distribution from any IRA account $6,000 would be nontaxable and $54,000 would be taxable (same 10:1 ratio), with the remaining $54K of basis staying in the IRA for future distributions.
2. If you never had any contributions that you were not able to deduct (nondeductible), then you have no cost basis in the IRA. The full amount of all distributions will be taxable.
