IRA cash withdraw from an acct which was rolled over from 401K. That 401K was made up of money from Pre Tax and After Tax. How do I account for tax already being paid?

[thekieferfour]

In 2018 I took a cash withdraw from my IRA. The company with held tax. However that IRA was from a rolled over 401K from several of years of contributions. However a few of those years of contirbutions was put in "After tax" so it was taxed at that time. How do I prove or show that taxes were paid on that money years ago? Otherwise I was taxed then and now. I'm also under 59 1/2 so have to pay a penalty of course. Thanks

[DanaB]

After entering your 1099-R when you get to the "Your 1099-R Entries" screen click continue until you get to the "Any Nondeductible Contributions to X's IRA?" screen and answer "Yes, X made and tracked nondeductible contributions" and enter the Basis on the next screen.

[Hal_Al]

The percentage of your withdrawal that is tax free is equal to your basis divided by your total IRA value times the withdrawn amount. The taxable amount is the Distribution less the tax free amount.

T = D - ( [B/V] x D)

T-Taxable amount

D- Distribution

B- Basis

V- Total Value of Account, including the distribution

It's best explained by example. Let's say you have a $6,000 balance in all your existing traditional IRAs on 12-31-18 and earlier in 2018 you withdrew $4000. The $10,000, that was in your IRAs, consisted of $3,000 in  after tax contributions, $2000 in deductible contributions and $5,000 in earnings (interest, dividends & capital gains). Your basis, in all your IRAs, is $3,000. Only 30% of the $4000 withdrawal ($1200) is tax free. TurboTax will divide that $3,000 basis by the $10,000 balance (the $4000 you withdrew plus the $6000 year end balance) to arrive at the 30% tax free ratio.  $2,800 of the withdrawal was taxable. Your revised basis, after that withdrawal, is $1800 (3000-1200).