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crccgary
New Member

Why is 1040 line 15a the amount I took out of my IRA and line 15b a different number, why??

does the program reduce the amount of distribution by the entire basis i have in the traditional ira?  this is the first time i have taken distributions.
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Accepted Solutions
DDollar
New Member

Why is 1040 line 15a the amount I took out of my IRA and line 15b a different number, why??

If you made non-deductible contributions to a Traditional IRA, a portion of your distributions will not be taxable as they will be a return of basis.  This will result in the amount on line 15a and 15b being different.  The amount that is return of basis is determine by calculating the percentage of the total IRA balance that is the non-deductible contributions, and then applying that percentage to the distribution amount. 

For example, if you IRA balance was $100,000 and your non-deductible contributions totaled $10,000, then 10% of your distribution would be a return of basis and non-taxable.

View solution in original post

1 Reply
DDollar
New Member

Why is 1040 line 15a the amount I took out of my IRA and line 15b a different number, why??

If you made non-deductible contributions to a Traditional IRA, a portion of your distributions will not be taxable as they will be a return of basis.  This will result in the amount on line 15a and 15b being different.  The amount that is return of basis is determine by calculating the percentage of the total IRA balance that is the non-deductible contributions, and then applying that percentage to the distribution amount. 

For example, if you IRA balance was $100,000 and your non-deductible contributions totaled $10,000, then 10% of your distribution would be a return of basis and non-taxable.

View solution in original post

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