I have filed form 8606 for years to track the after tax IRA contributions I made till I retired. When I retired, I rolled over my 401K that had pre-tax and after-tax money which I rolled over into an IRA and it is held in a different financial institution than my older IRA. I have not filed an 8606 the 401K rollover. I have “not” started taking the RMD from any IRA yet, so when do I add the 401K rollover IRA “after tax” money onto the 8606? Do I add that money to the 8606 that I have been filing for years for my non-deduction IRA when I “start” RMD withdrawals?
From IRS pub 590-B....
A Form 8606 isn’t used for the year that you make a rollover from a qualified retirement plan to a traditional IRA and the rollover includes nontaxable amounts. In those situations, a Form 8606 is completed for the year you take a distribution from that IRA. See Form 8606 under Distributions Fully or Partly Taxable in Pub. 590-B
Thank you for your answers.
Yes, when you start taking distributions from your IRA, you will then need to adjust your basis in your IRA and include any such adjustment on Form 8606. The adjustment you will make will take into account the after-tax money you contributed to your 401(k). Keep your records for when you will need to make the necessary adjustment.
Thus, for now, do not enter the after-tax contributions you made to your 401(k) on Form 8606. Form 8606 deals with non-deductible contributions to traditional IRAs, conversions of IRAs to Roth IRAs, and distributions from Roth IRAs. It does not concern rollovers of a 401(k) to a new IRA.
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