Roth IRA Basis of contributions as of 12/31/20xx with funds from Jan 1 to Apr 15 of next year

[n64ra]

When contributions to a Roth IRA are made between January 1 and April 15 for the prior year, which year does that contribution affect the basis of contributions? Is it the year in which it's made or the year it is for (that is, prior year)? Maybe an example will help.

Say $10,000 was added to a Roth IRA in the 2010s. No contributions occurred during the 2020s until...

• On December 10, 2023, $3,000 was contributed (so obviously for the 2023 year).
• On January 10, 2024, $3,500 was contributed for the 2023 year.
• On June 12, 2024, $5,000 was contributed (so obviously for the 2024 year). 
• On January 20, 2025, $2,000 was contributed for the 2024 year.

a) What is the Roth IRA basis of contributions as of 12/31/2023? It must either be $13,000 or $16,500.

b) What is the Roth IRA basis of contributions as of 12/31/2024? It must either be $21,500 or $23,500.

[MindyB · Accepted solution]

The ending basis will include the contributions you directed to be applied to one tax year during the following tax year.  In other words, your 2024 contributions include contributions made for 2024 between 1/1/25 and 4/15/25- so your ending 2024 basis includes them.

a. 2023 ending basis is $16,500

b. 2024 ending basis is $21,500