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Pantelis
Level 1

How to specify that my IRA distribution was both 5.5k of nondeductible 2016 contrib and 2k of rollover from 401k after tax

Hello
In 2016 I made a 5.5k non deductible contribution to IRA and transferred another 2k from a 401k after tax account. The 2k is gains only (moved the contributions to a roth IRA also), so I'm fine paying taxes there, but I can't tell turbo tax that. It seems to think I have to pay taxes on full 7.5k, or I can force it to think that 7.5 was the transfer with 5.5k cost, but that's not true either. Ideally I'd want 0 cost bases for the 2k and file 8606 for the 5.5k.

Turbo tax seems to only ask for non-deductible contribs from 2015 or earlier, but I started 2016 with 0 balance.
It seems clean cut case to me but I can't seem to figure it out!

Any guidance or help?

thanks
1 Best answer

Accepted Solutions
dmertz
Level 15

How to specify that my IRA distribution was both 5.5k of nondeductible 2016 contrib and 2k of rollover from 401k after tax

Regarding the $5.5k, you must enter your nondeductible 2016 traditional IRA contribution under Deductions & Credits

The gains distributed from your after-tax 401(k) account are before-tax amounts and do not add to your basis in traditional IRA contributions.  That makes the taxable amount of a $7.5k distribution or Roth conversion from your traditional IRA $2k taxable.

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2 Replies
dmertz
Level 15

How to specify that my IRA distribution was both 5.5k of nondeductible 2016 contrib and 2k of rollover from 401k after tax

Regarding the $5.5k, you must enter your nondeductible 2016 traditional IRA contribution under Deductions & Credits

The gains distributed from your after-tax 401(k) account are before-tax amounts and do not add to your basis in traditional IRA contributions.  That makes the taxable amount of a $7.5k distribution or Roth conversion from your traditional IRA $2k taxable.

Pantelis
Level 1

How to specify that my IRA distribution was both 5.5k of nondeductible 2016 contrib and 2k of rollover from 401k after tax

Thanks a lot!!!
I realize I was getting confused because I didn't see any questions for the 2016 (inline with reporting the 1099R), but jumping ahead to the deductions made everything add up correctly eventually!

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