How are the numbers entered into the 8606 form? Particularly, line 2, which is the "total basis in traditional IRAs."
-There is an IRA with $1700 in it. These funds were rolled over from a 401k in prior years and the money is pre-tax.
-Another IRA account was opened in Nov. 23 and funded with $500 post-tax money. If February '24 another $2000 post-tax was deposited to this account (total $2500 for 2023).
1) For line 1 on the form, "Enter your nondeductible contributions for 2023", should it be $2500?
2) What goes on line 2 "your total basis in traditional IRAs."? Should it be the $1700 or zero?
From the IRS instructions "Instructions for Form 8606", it says about line 2, "You may need to enter an amount that is more than -0-"... "You rolled over any nontaxable portion of your qualified retirement plan to a traditional, traditional SEP, or traditional SIMPLE IRA that wasn’t previously reported on Form 8606, line 2. Include the nontaxable portion on line 2.
The $1700 was rolled over many years ago from a pre-tax 401k.
Thank you!
