basis for inherited IRA

Xian2 · ‎March 5, 2021

I have a non spousal inherited IRA, that I need to draw down over 10 years according to the elimination of the stretch IRA. I don't have any information about the basis of the IRA, but since the parents were well off assume that they made NON deductible IRA contributions to their Trad IRA. Obviously this would reduce the taxable portion of any withdrawal. Since we did not keep any filings/paperwork from the parents, what assumptions can we make regarding basis and non deductible contributions with the IRS? or do we have to bite the bullet and just pay taxes on full amount of the withdrawals?

AmyC · ‎March 5, 2021

No assumption other than all taxable. Any non-deductible basis would be captured on form 8606. You can request tax transcripts to see if form 8606 was ever filed. They may have even filed it annually just to carry the basis forward. You can locate contribution dates and the tax returns for the corresponding years. You may be able to prove the non-deductibility of some.

With no basis proven, it will all be taxable.

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AmyC · ‎March 5, 2021

No assumption other than all taxable. Any non-deductible basis would be captured on form 8606. You can request tax transcripts to see if form 8606 was ever filed. They may have even filed it annually just to carry the basis forward. You can locate contribution dates and the tax returns for the corresponding years. You may be able to prove the non-deductibility of some.

With no basis proven, it will all be taxable.

See Get Transcript | Internal Revenue Service

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