How to determine the basis of a nondeductible after-tax Traditional IRA contribution made in 2012 when converting to a Roth IRA in 2017?

[financian]

In 2012, I put $4000 tax money in a traditional IRA account and filed form 8606 for the 2012 tax year. That $4000 was the only contribution I have ever made in that IRA account. In 2017, I converted the entire balance ($4000+$1000 capital gains) of that traditional IRA into a Roth IRA. My question is, what is the basis of my nondeductible contribution? Is it $4000 or $5000, or the ending balance of the account on 12/31/2016? Thank you.

[dmertz · Accepted solution]

Your basis the amount reported on line 14 of your last-filed Form 8606 prior to 2017.  That would be $4,000 on line 14 of your 2012 Form 8606 if you never made any other nondeductible traditional IRA contributions.

It doesn't matter what account received your nondeductible traditional IRA contributions.  Your basis in nondeductible traditional IRA contributions applies in aggregate to your traditional IRAs in aggregate.

[financian]

Thank you! That makes sense.