Yes- and you must report it.
You do report nondeductible IRA contributions on your tax return. You cannot just claim them as part of basis when you take the money out. You have to establish the basis (via Form 8606) now.
IRA contributions are reported under:
-Federal Taxes, Deductions and Credits
-Retirement and Investments
-Traditional and Roth IRA Contributions
-Traditional IRA
-With the question, "Any Nondeductible Contributions to Your IRA?"- answer No, as its not asking about this contribution
-You will be given the opportunity to make it nondeductible as you go along in these screens.
