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New Member
posted Jun 7, 2019 3:39:22 PM

I converted my Traditional IRA account to Roth IRA in 2018. How do I calculate the taxable portion on this conversion?

The taxable amount that Turbo Tax software calculated for me is the difference between the money I put in and amount converted.   I also have some money in a nondeductible IRA.  What is the total basis of my Traditional IRA?

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Level 15
Jun 7, 2019 3:39:23 PM

There is no such thing as a " nondeductible IRA".   Any non-deductible contributions become a basis in the aggregate total of all Traditional IRA's.


You can NEVER withdraw ONLY the nondeductible part - it must be prorated over the entire value of ALL Traditional IRA accounts which include SEP and SIMPLE IRA's.   (For tax purposes you only have ONE Traditional IRA which can be split between as many different accounts as you want, but for tax purposes they are all added together).

For example using rough figures: if you had $60K of nondeductible contributions in an IRA with a total value of $600K (10:1 ratio), then when you take a $60K distribution from any IRA account $6,000 would be nontaxable and $54,000 would be taxable (same 10:1 ratio) , with the remaining $54K of basis staying in the IRA for future distributions.  As long as there is any money in the IRA, there will be some basis.

TurboTax will ask for your non-deductible "basis" and then the *Total Value* of *all* Traditional IRA, SEP and SIMPLE accounts as of Dec 31, of the tax year.   That is so the prorating of the basis can be properly proportioned between the current years distribution and the remaining IRA value.   That is done on the 8606 form.

2 Replies
Level 15
Jun 7, 2019 3:39:23 PM

There is no such thing as a " nondeductible IRA".   Any non-deductible contributions become a basis in the aggregate total of all Traditional IRA's.


You can NEVER withdraw ONLY the nondeductible part - it must be prorated over the entire value of ALL Traditional IRA accounts which include SEP and SIMPLE IRA's.   (For tax purposes you only have ONE Traditional IRA which can be split between as many different accounts as you want, but for tax purposes they are all added together).

For example using rough figures: if you had $60K of nondeductible contributions in an IRA with a total value of $600K (10:1 ratio), then when you take a $60K distribution from any IRA account $6,000 would be nontaxable and $54,000 would be taxable (same 10:1 ratio) , with the remaining $54K of basis staying in the IRA for future distributions.  As long as there is any money in the IRA, there will be some basis.

TurboTax will ask for your non-deductible "basis" and then the *Total Value* of *all* Traditional IRA, SEP and SIMPLE accounts as of Dec 31, of the tax year.   That is so the prorating of the basis can be properly proportioned between the current years distribution and the remaining IRA value.   That is done on the 8606 form.

Level 15
Jun 7, 2019 3:39:25 PM

To reach the necessary questions in TurboTax, be sure to click the Continue button on the Your 1099-R Entries page.