Amending 2019 Return Due to Nondeductible IRA Contributions

[MtnTABS]

2019 was the first year my IRA required RMDs. All the contributions in my IRA were made by me using after-tax dollars but I did not consider that when I answered the TT questions thus I did not figure my “basis” in 2019. On my 2019 1099-R the amount of my gross distribution appears in Box 1 and the identical amount appears in Box 2a. Box 2b has an X in it, Box 7 has a 7 in it and the IRA/SEP/SIMPLE box has an X in it. 

I have made a copy of the TT steps to take to amend a 2019 return (Deluxe CD/Download). Once I reach the point where I am ready to amend the return, do I delete my original 1099-R and work my way through the steps again by telling TT that part of the IRA has  nondeductible contributions? 

Another glitch I discovered in my 2019 returns: I filed 2019 returns in July, 2020. Because my husband passed away in Feb., 2020, I realized after my e-file attempts failed that I had to change my name to the “taxpayer” and my dec’d husband as “spouse” and then the returns were accepted. At the same time, HOWEVER, what I did not realize until this year was that my husband’s 2019 CSA-1099-R automatically switched to my name and SS#, too. 😬 I see that there is a box to check indicating “spouse” if I switch to the CSA-1099 in FORMs in order to get that problem fixed or do I have to delete it and start over using Step-by-Step? Thank you for your assistance! 

[hbl3973]

MtnTABS,

Oh dear, it sounds like you did not file IRS 8606 forms in the past to keep track of the basis.  According to part of the lengthy discussion in the article

https://ttlc.intuit.com/community/retirement/discussion/i-neglected-to-file-my-non-deductible-ira-co...

the IRS takes a position that any such contributions not reported on 8606 are not treated as basis in your IRA.  If you did make nondeductible contributions in the last 3 years (maybe only 2 as it is past April 15), you can file the 8606 forms with the IRS and pay a $50 late fee for each of those 2-3 years you did make nondeductible contributions.  (You can plead ignorance and ask the IRS to waive the fee.)  Use the basis total reported on those late forms as your IRA basis for your 2019 amendment.

[MtnTABS]

I have no “basis”. The 8606s ran down to -0- in 2016. Everything left in my IRA is taxable.  I have made no non-deductible contributions nor ANY contributions. 

TT still will not enter the $25,000 cash distribution as taxable (not showing on Line 4b) but it is rightly taxing the $100,000 ROTH conversion (shows on Line 4b) and 8606 Part II. PART I is blank but I think therein lies my problem but someone else said “no”. 

If you have any other ideas I would welcome them. Thank you. 

[MtnTABS]

I’m sorry.....I just realized you were responding to my lack of 8606s on my OTHER self-funded IRA but in my research of our old returns I realized that we took my IRA contributions as deductions each year so I don’t have a “Basis” in that IRA either. Sorry, 31 straight days of this and I am a mess!

[hbl3973]

So, if I understand you correctly, you just need to enter a basis of $0 for the IRA 1099-R distribution.  Your original posting said you had entered the distribution amount in the basis field.

(Not clear how a basis works down to zero if the IRA has a nonzero balance, but that wasn't the question you asked.)