Neither the
number in Box 1 of your Form 1099-R nor the amount of the lump sum that you
actually received after taxes were withheld would be the amount you should
enter for your basis.
“Basis of retirement
income” is referring to the amount of after-tax contributions that were
made to the retirement account. The
basis is used to determine the taxable amount of a distribution from a
retirement account. You would not pay
taxes on the portion of the distribution that is attributable to the basis
(because it is after-tax money).
So, if you never made
any after-tax contributions to your pension, then your basis would be $0. If you had contributed after-tax money to the
pension plan, your contributions (or basis) may be shown in Box 5 of your Form
1099-R.
