Roth IRA withdrawls and basis calculations

[form8606]

I have a Roth IRA that I last contributed to in the early 2000s. I also converted a balance from a traditional IRA in that same time period. I am now over 59 1/2 and took my first withdrawal from my Roth last year. I received a 1099-R, with a distribution type of 'T'.

Going through Turbotax to report this withdrawal, I get a lot of questions about the basis. Since my contributions and earnings are all tax-free at this point, I don't understand the necessity of going back through all my records to compute the basis. Can someone explain to me the benefit of doing these calculations for someone in my situation?

[ThomasM125]

If you withdraw earnings from a ROTH IRA and the IRA funds have not been held in the account for five years, then the earnings are subject to a penalty and tax. TurboTax may be asking you information about when and how much you contributed and fund balances to determine if any of your withdrawals are subject to a penalty and tax because of the five year rule. Even though the five year rule may not apply to you because of when you last made contributions, the questions in TurboTax may not take that into consideration to err on the side of safety. It seems the code in box 7 may incorrect, but you would have to ask your broker for clarification on that matter. 

@form8606

{Edited 3/9/23 at 6:12 PM PST}

[form8606]

Thanks for the reply. So if I am definitely not subject to penalties because all my contributions to my Roth IRA were made more than five years and I'm over 59 1/2, can I just enter some placeholder numbers in the TT questionnaire? I am trying to avoid digging out tax returns from 20+ years ago if I don't have to.

[dmertz · Accepted solution]

You can just enter zeros for your basis or leave the entries blank.  All you need to do is, when asked, tell 2022 TurboTax that you had a Roth IRA before 2018 and TurboTax will treat code T the same as code Q.

[form8606]

Thanks, @dmertz !