1099-R Distribution

[mjn0309]

I withdrew money from a traditional ira that I paid for after tax.   My 1099-R indicates the gross distribution .  Box 2a shows the total distributed as taxable.  2b says taxable amount not determined.  Turbo Tax is calculating the tax automatically.  where to I override this and tell turbo tax that this 1099 is not taxable?  

[userfredly]

The money you contributed (your "basis") is not taxable, but any interest, dividends, or capital gains that were earned by your IRA *are* taxable when you withdraw them. I believe that an IRA trustee will preferentially allocate your withdrawal to taxable earnings rather than a withdrawal of non-taxable principal. 

[macuser_22]

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@mjn0309 wrote:

I withdrew money from a traditional ira that I paid for after tax.   My 1099-R indicates the gross distribution .  Box 2a shows the total distributed as taxable.  2b says taxable amount not determined.  Turbo Tax is calculating the tax automatically.  where to I override this and tell turbo tax that this 1099 is not taxable?  

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Why do you think that it is not taxable?  

Do you have previous non-deductible contributions?

[macuser_22]

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@userfredly wrote:

The money you contributed (your "basis") is not taxable, but any interest, dividends, or capital gains that were earned by your IRA *are* taxable when you withdraw them. I believe that an IRA trustee will preferentially allocate your withdrawal to taxable earnings rather than a withdrawal of non-taxable principal. 

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There is a "basis" ONLY if the Traditional IRA contributions were not deducted.   If deducted then they do not add to the "basis".

The IRA trustee CANNOT determine the taxable amount because any "basis" that exists is based on the aggregate value of ALL Traditional, SEP or SIMPLE IRA accounts that exist, so any account  trustee cannot know about other accounts with other financial institutions.   Only the taxpayer can track that on a 8606 form that is required to report and track any basis.