Question on IRA withdrawal and form 5498

[brian-perrigino]

I have three  traditional IRAs.  One was sourced from non-deductible contributions (balance about $200K) one  was sourced from a 401K rollover (balance over $1M) and the third is a managed IRA sourced from the rollover (balance about $250K).   In 2025, I withdrew $100K from the first referenced IRA and moved it to a Roth IRA. (This was my first contribution to a Roth).  I have not made any contributions to these accounts for several years. As I enter the information into Turbo Tax, I get to the question... Enter the total value of all of your traditional IRA, SEP, and SIMPLE IRA accounts on December 31, 2025. This information is sent by mail on Form 5498. Do not include Roth IRAs.

Is the amount to be entered the total balances in the THREE IRAs or just the one with the withdrawal?  This makes a big difference in my refund. I understand that the $100K is taxable, but don't understand why the balance would affect the tax liability/refund amount.   Also, it says the form will be mailed by May 31st  which doesn't make any sense to me?

Thanks in advance for the help.

Brian

[brian-perrigino]

More Info (and maybe I figured it out?).  My cost basis on the non-deductible IRA that had the withdrawal was $37,741.  I was assuming that this basis only applied to the one account and not all accounts but maybe that's not the case, i.e. the non-taxable portion of the $100,000 withdrawal is a lot less when the total balance is bigger.  So it looks like it spreads the cost basis across all accounts as opposed to the one that had the contributions.  Make sense?

[dmertz · Accepted solution]

"Is the amount to be entered the total balances in the THREE IRAs or just the one with the withdrawal?"

All three.  For the purpose of calculating nontaxable and taxable amounts, all of your traditional IRAs are treated as one combined traditional IRA.

With about $37,741 basis in nondeductible traditional IRA contributions and around $1.5M in traditional IRAs, about $2,500 of your Roth conversion is nontaxable, about $97,500 is taxable and about $35,200 of your basis remains in your traditional IRAs to be proportionately applied to future distributions from any of your traditional IRAs

[brian-perrigino]

Thank you.  I actually closed the small IRA in 2026 figuring I'd just use up the full cost basis when I file next year but I guess I'll have some small cost basis pretty much forever.  I'm glad that TT remembers it 🙂

Brian

[dmertz]

That's correct.  Until you have a zero balance in traditional IRAs at year end, you'll continue to have some basis remaining.