Amended Form 8606

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If you are not sure whether you are required to file a tax return or not,

see IRS Pub 17 for who must file.

BUT, if you already did file, that becomes irrelevant.

"Do I really need a 1040X with nothing updated just to include the explanation with the forms? "

There are at least two reports on this forum that IRS sent the Form 8606 back because it was not attached to Form 1040-X.

Note: when you are not changing any dollar amounts on your amended tax return, you can leave all the lines 1-23 EMPTY.

@Anonymous 

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@Tremaine2 

Note: when you are not changing any dollar amounts on your amended tax return, you can leave all the lines 1-23 EMPTY.

I pointed this out earlier above.

You don't have to dig out copies of old  tax returns that you might have lost or discarded.

You need to know your filing status that year.

[Tremaine2]

Thanks, most helpful!

[KREC]

Multiple issues:

1. 8606 carryovers on cost basis were not accurate on multiple years going back many years ago. As others have pointed out, prior year total basis on line 2 did not always pull into the following year’s 8606 so I have several I need to amend.

2. to further complicate, there are a few intervening years where I don’t have access to my return or a 5498 to confirm a contribution was made (although it likely was as the year prior to the missing year and the year after I did) and if one was I can’t confirm it was non deductible as I don’t have the tax return. The tax year is 16 years ago and from what I can gather, you can’t go back that far to request a transcript or copy of a return from IRS? I know through online requests they don’t go back that far but if you request a return via the 4506 form will they go back that far? 

3. when amending the 8606 for the  intervening year where I can’t verify the contribution amount or its deductibility status, do I just put a zero for contribution and calculate the basis based on whatever the prior year’s verifiable contribution was?  For the total basis I would only carryover what I could verify from the prior year’s return?

[dmertz]

IRS Pub 590-A says:

Failure to report nondeductible contributions.

If you don’t report nondeductible contributions, all of the contributions to your traditional IRA will be  treated like deductible contributions when withdrawn. All distributions from your IRA will be taxed unless you can show, with satisfactory evidence, that nondeductible contributions were made.

I would interpret that to mean that you must omit from line 1 of an amended Form 8606 for a particular year any amount for which you cannot provide evidence that you 1) made the traditional IRA contribution for that year and 2) that you did not deduct the contribution on your tax return for that year.

[KREC]

a few more questions.

1. am I correct to assume that I cannot obtain any tax return documents such as 1040s and 8 606s that go back 16 years or longer?

2. without being able to obtain those very old returns, I have no way of knowing if there is an 8606 to correct for that year (or whether I took it as a deductible contribution), so do I start with whichever year I do have returns for and supporting documentation and use that as my starting point to track basis and and exclude the unknown information possibilities from the prior years?

thanks

[Opus 17]

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@KREC wrote:

a few more questions.

1. am I correct to assume that I cannot obtain any tax return documents such as 1040s and 8 606s that go back 16 years or longer?

2. without being able to obtain those very old returns, I have no way of knowing if there is an 8606 to correct for that year (or whether I took it as a deductible contribution), so do I start with whichever year I do have returns for and supporting documentation and use that as my starting point to track basis and and exclude the unknown information possibilities from the prior years?

thanks

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1. The IRS can only provide copies of tax returns for 7 years, and transcripts (an electronic summary) for 10 years.  

https://www.irs.gov/individuals/get-transcript

https://www.irs.gov/taxtopics/tc156

2. You can only claim what you can prove if audited.  You will need to get your tax transcripts and IRA records together and compare them.  You will need to match contributions to your tax return, determine if you took a tax deduction or not, and whether or not you filed form 8606 (and if it was correct or not).  Whatever is the earliest year you can prove everything, you go forward from there and whatever happened before that is lost.  

[dmertz]

I agree with Opus 17.

Note that Form 8606 is one of the forms that the IRS says that you should retain forever.  Given that, one can probably infer that, absent the ability to produce a Form 8606 for a particular year, the IRS can probably take the position that one was not filed for a particular year.

[KREC]

Thank you. Additional question. $3000 originally went to Roth then was rechristened to a Traditional IRA. When it came over to the IRA it was about $15 less than the original contribution, assuming there was a loss during the time between original contribution and recharacterization. Which number do you use for line 1, the original $3000 or the new number ($3000-$15)? If you also then contributed additional $1000 directly to the traditional, would you add both to come up with line 1? What about the reverse, if Roth contribution comes back with earnings when characterized to TIRA, do earnings get included or excluded from line 1 of 8606?

[KREC]

Thank you. Additional question. $3000 originally went to Roth then was rechristened to a Traditional IRA. When it came over to the IRA it was about $15 less than the original contribution, assuming there was a loss during the time between original contribution and recharacterization. Which number do you use for line 1, the original $3000 or the new number ($3000-$15)? If you also then contributed additional $1000 directly to the traditional, would you add both to come up with line 1? Also what about the reverse, if characterized Roth comes back to IRA with earnings do the earnings get reported in line 1 or just whatever the original Roth. Contribution was?

[dmertz]

The amount to include on line 1 for a $3,000 Roth IRA contribution to be a nondeductible traditional IRA contribution instead is $3,000, just the amount of the original contribution.  The earnings, positive or negative, are still earnings.

If you separately made another $1,000 nondeductible contribution to the traditional IRA contribution for the same year, that $1,000 what also need to be included on line 1.

[KREC]

Thanks, but what if the 3000 came back as a lesser amount due to loss while it was sitting in the Roth? Is it still 3000 for the purposes of the 8606 or is it whatever the lesser amount is that was transferred after the incurred loss, while it sat in the Roth?

[dmertz]

$3,000.

[KREC]

Added question: if there are a few years between 8606s: where I know a contribution was made to a TIRA, but can’t get a 1040 for those years to confirm whether it was treated as a deductible or non deductible, do I skip those years and just carryover the cost basis from the year prior to those two years when I can document how the contribution was treated?

[dmertz]

If you made no traditional IRA distributions or Roth conversions that year and you are not claiming a nondeductible traditional IRA contribution for that year, there should be no Form 8606 for that year.  The amount from line 14 of the a Form 8606 just carries forward to line 2 of the next Form 8606 that you do have reason to file whatever year that might be.