I don't know what IRA basis adjustment means

4053harding · ‎March 25, 2023

DanaB27 · ‎March 25, 2023

Your traditional IRA basis (nondeductible contributions) is tracked on Form 8606. But there are situations when you might have to make adjustments to your recorded basis:

You had a return of excess traditional IRA contributions
Incident to divorce, you transferred or received part or all of a traditional, SEP, or SIMPLE IRA
You rolled over any nontaxable portion of your qualified retirement plan to a traditional, SEP, or SIMPLE IRA that wasn’t previously reported on Form 8606, line 2. Include the nontaxable portion on line 2.

Please see Form 8606 Instructions for more details.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

dmertz · ‎March 25, 2023

Add to DanaB27's list the adjustment needed if you inherited from your spouse a traditional IRA, your spouse had basis in nondeductible traditional IRA contributions and you chose to treat the IRA as your own.

2022 TurboTax will ask you to provide an explanation for any change you make to your basis in nondeductible traditional IRA contributions carried in from your 2021 TurboTax tax file.