topic IRA Information Worksheet-Roth Basis in Retirement tax questions

IRA Information Worksheet-Roth Basis

Username5 — Tue, 25 Feb 2025 02:46:01 GMT

Taxpayer & Spouse last contributed to Roths around 20 yrs ago. Since then only contributed to TIRA's. In 2024 we did Roth conversions. Reviewing my completed but not yet filed 24 return, the "IRA Info Worksheet" Part II, Part V, line 51 contain a number of unknown origin for "Cumulative Contribution Basis". It is a tiny fraction of what we converted on this return, I did not enter these numbers myself, and all prior returns back to 2005 contain NO Entries of any kind for a Roth. We have been taking TIRA rmd's for 5 years. We have never taken a distribution from a Roth.

1) How specifically did these numbers generated by TTax?

1a) Perhaps TTax generated them while adjusting TIRA basis for prior deductible contributions? If so I cannot find the math to back this up and anyway how would this relate to a Roth?

2) It appears that I need to reconstruct the past to maintain a Roth basis. Does this require an amended return?

3) I'm under the impression that distributions from a Roth are tax free so why is a basis even needed?

Thanks in advance for your help in this odd matter.

Re: IRA Information Worksheet-Roth Basis

NCperson — Thu, 15 May 2025 19:09:32 GMT

if you are OVER 59.5 years old and ANY Roth account in your name has been open for at least five calendar years, no Roth distribution will ever be taxed.

But if you are UNDER 59.5, then the issue is different.

@Username5

Re: IRA Information Worksheet-Roth Basis

Username5 — Tue, 25 Feb 2025 03:00:12 GMT

'We' are over 70.5 and our Roths have been open about 20 yrs.

In our situation can we simply ignore the basis entries for Roth in the various fields?

Re: IRA Information Worksheet-Roth Basis

dmertz — Tue, 25 Feb 2025 14:31:49 GMT

1) The amount on line 51 of the IRA Information Worksheet comes from user entries of ordinary Roth IRA contributions and from basis rolled over to a Roth IRA from a designated Roth account in an employer plan (a 401(k), 403(b), governmental 457(b) or the federal TSP) via Forms 1099-R entered by the user.

1a) No, entries of traditional IRA basis have nothing to do with any amount on line 51.

2, 3) As indicated by NCperson above, you no longer need to know the basis in Roth IRA contributions and conversions to determine taxable amounts of distributions from your Roth IRAs. These distributions are now tax-free, qualified distributions which are not reportable on Form 8606.

Re: IRA Information Worksheet-Roth Basis

Username5 — Wed, 26 Feb 2025 01:57:09 GMT

@dmertz The reason I posted the question in the first place is that no where at any time has our Roth contributions been entered into TTax in the 11 yrs I have been using it. I checked all my prior years back to 1998 and did not see any entry for a Roth. In spite of it not making a difference (unless Congress changes it) I just wondered where these numbers for a Roth Basis came from. The IRA Info WkSht has the correct info on line 7, which was the amount converted. But line 6 has a basis that is, IMO, fictitious. I say that because never has a Roth contribution been entered or reported on a form that I have received. It makes me wonder about TTax's calculations.

I'm gratified to know that it doesn't make any difference whatsoever, especially since we are in our late 70's.