IRA Basis

Forum|Forum|1 year ago
February 18, 2025
1 reply
16 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?

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NormVisteAuthor

Level 2

As I said, 1040.

DanaB27

Level 15

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.

To clarify, do you have more than one Form 1099-R? Make sure you have the IRA/SEP/SIMPLE box checked.

As DavidD66 explained if you have a mix of pre-tax and after-tax funds then the the pro-rata rule applies. You can check Form 8606 for the calculation, if you have a * next to line 13 then TurboTax is using the IRA worksheet according to Pub 590-B to calculate the nontaxable part. If you have a value on December 31, 2024 in the IRA then part of your basis will be allocated to the funds left in the IRA. You cannot just deduct all of your basis first.

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