topic Re: Form 8606 in Get your taxes done using TurboTax

Form 8606

GaryEKruse — Mon, 09 Feb 2026 17:06:45 GMT

I have a small amount of non-taxable funds in my IRA. I have met all RMD requirements. When I enter the value of all my IRAs on Line 7 of Form 8606, the expected return amount goes down. I cannot understand why that would happen since the carryover of the basis entered on line 6 comes from the previous year taxes. My expected return goes down by about a third of the basis. I cannot understand why that happens. Thank you for any comment you may have to educate me.

Re: Form 8606

ReneV4 — Mon, 09 Feb 2026 20:37:44 GMT

Your expected return amount may be going down due to how the IRS mandates that distributions be taxed.

As long as you have any pre-tax money in any Traditional IRA, you are forced to "pro-rate" your basis over time.

If your basis is a small percentage of the total value of all of your IRAs, then a smaller percentage of your RMD will be tax-free.

Re: Form 8606

GaryEKruse — Mon, 09 Feb 2026 20:57:07 GMT

Thank you for the explanation. Looking back at previous returns I find that not only did I pay taxes originally on that money, but in the last six years I have paid more in extra taxes than the value of the contributions. So it is a complete loss. Live and learn.