I have made 26000 in nondeductible ira contributions. Last form 8606 form 1999 only shows total basis of 2000 as do all prior 8606. How do I show correct total basis?

[dmertz]

How did you acquire the additional $24,000 of basis?  Did you make regular nondeductible traditional IRA contributions after 1999 and fail to file the required Forms 8606 for the years for which you made those contributions?

[jjshift]

2K per year 87 to 99. Changed CPAs a few times and they didn't accumulate prior years properly. Can I just enter the correct basis figure?

[dmertz · Accepted solution]

You might be able to submit a corrected 1999 Form 8606 with a comprehensive explanation statement, but the proper way is probably to file Forms 8606 for all of the years that they were missed and amend the incorrect 1999 Form 8606, and amend any other incorrectly filed Forms 8606 as well.

Go here and enter "8606" to find the Forms 8606 and instructions for years 1987 through 1999.  Correct Forms 8606 will show the following:

• 1987, 1988 are complicated because the preparation depends on whether contributions were made during the tax year or before the tax-return due-date the following year.  The method of calculation was revised and simplified for 1989 and later years, but still have some complications based on the timing of the contributions.  I'll provide the lines of main interest, but some of the intermediate lines may need to be completed as well.  (However, assuming that you made no distributions over all of the years in question, you can probably just treat the contributions as having been made during the year for which the contributions were made.)
• 1989: line 2 = $2,000, line 3 = $4,000, line 14 = $6,000
• 1990: line 2 = $2,000, line 3 = $6,000, line 14 = $8,000
• 1991: line 2 = $2,000, line 3 = $8,000, line 14 = $10,000
• 1992: line 2 = $2,000, line 3 = $10,000, line 14 = $12,000
• 1993: line 1 = $2,000, line 2 = $12,000, line 12 = $14,000
• 1994: line 1 = $2,000, line 2 = $14,000, line 12 = $16,000
• 1995: line 1 = $2,000, line 2 = $16,000, line 12 = $18,000
• 1996: line 1 = $2,000, line 2 = $18,000, line 12 = $20,000
• 1997: line 1 = $2,000, line 2 = $20,000, line 12 = $22,000
• 1998: line 1 = $2,000, line 2 = $22,000, line 12 = $24,000
• 1999: line 1 = $2,000, line 2 = $24,000, line 12 = $26,000

I think I got all of those line number right.  This all assumes that you made no distributions during that time.

Given how long ago the mistakes were made, there's a good chance that the IRS will bill the $50 late filing penalty for each of the 13 years, a total of $650 in penalties.  The IRS might need to confirm that you did not take a deduction for the contribution for any of those years and might need to verify with Forms 5498 for those years that you actually made the contributions (hence the penalties to pay for the effort of digging up all of your old tax returns and Forms 5498).

[lasersail12]

@jjshift 

Wondering...did you get charged the $50 late filing penalty for each of the 13 years?