There are two different places in TurboTax where it asks for you year-en value in traditional IRAs. The most common reason that the FMV affects your tax liability is when you have made a distribution or Roth conversion from a traditional IRA and you have basis in nondeductible traditional IRA contributions shown on Form 8606. Your year-end balance affects the taxable and nontaxable proportions of the distribution; a higher year-end balance means that more of your distribution is taxable. (TurboTax assumes that your year-end balance is zero until you enter it.)
The second place that TurboTax needs to know your year-end balance is if you made an excess contribution to your traditional IRAs. The 6% excess contribution penalty is calculated on the amount of the excess or your year-end balance, whichever is less.
yes there are several such scenarios and that is why they ask for it.
There are two different places in TurboTax where it asks for you year-en value in traditional IRAs. The most common reason that the FMV affects your tax liability is when you have made a distribution or Roth conversion from a traditional IRA and you have basis in nondeductible traditional IRA contributions shown on Form 8606. Your year-end balance affects the taxable and nontaxable proportions of the distribution; a higher year-end balance means that more of your distribution is taxable. (TurboTax assumes that your year-end balance is zero until you enter it.)
The second place that TurboTax needs to know your year-end balance is if you made an excess contribution to your traditional IRAs. The 6% excess contribution penalty is calculated on the amount of the excess or your year-end balance, whichever is less.