IRA Basis

Forum|Forum|1 year ago
February 18, 2025
1 reply
15 views

TurboTax has not deducted IRA Basis from 1040 IRA distributions, line 4a and 4b, to get taxable amount. How can I fix that?

TurboTax Home & Biz Windows

DavidD66

Level 15

Can you clarify please. What form are you referring to with 4a and 4b?

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

NormVisteAuthor

Level 2

As I said, 1040.

NormVisteAuthor

Level 2

You don't deduct the basis in an IRA to get to the taxable amount. A distribution from an IRA that has both pre-tax and after tax contributions is a combination of both. For instance, if you had an IRA with $20,000 of after-tax contributions (basis) and $80,000 of pre-tax contributions and gains, then a distribution from the account would be 20% basis and not taxable, and the other 80% would be taxable. The ratio is calculated as of December 31 of the year prior to the distribution. This is calculated on Form 8606.

I replied earlier, but I got a message saying it did not go thru, so I'll reply again.

I'm concerned about subtracting the total basis from a complete sale of an after-tax IRA.

Form 8606 only only subtracts a non-taxable portion as though I was only taking a minimum distribution, but I have sold the complete fund (actually, 3) and the remaining total basis should be subtracted from the distribution.

I can't see how to get Turbo Tax to do that.