FMV of ALL IRA's form 8606

[aalinda01]

I received a letter stating I need to take an RMD this coming year.  I did not remember this IRA.  Does the FMV for this IRA  need to by included on Line 6 for 2024?  (Line 6 says ALL IRAs)  I have only been reporting the FMV on form 8606 from the IRA that I am receiving distributions. Have I been doing this wrong?  Is so do I have to go back 10 years (or longer and amend? I did not make any contributions in 2024

[AmyC]

1. Yes, the Instructions for Form 8606 state: Enter the total value of all your traditional, traditional SEP, and traditional SIMPLE IRAs as of December 31, 2024, plus any outstanding rollovers.

2. Yes. since the form 8606 tracks your basis in traditional IRAs across all accounts. 

3. Yes. I have seen the IRS ask for 30 years of 8606 forms. I recommend you amend the forms and mail each one in separately- with tracking. Be sure to sign the form. Keep a copy for you.

[aalinda01]

I have a 8606 for all years I made non deductible amounts.  Prior to 2017 I was not getting a distribution from any IRA so the taxable amount would have been 0.  Distributions started in 2017. So that is when I needed the FMV to calculate the taxable amount ?  So I only need to go back to  2017? 

I don't owe federal taxes and I have sent in the 8606 every year by itself.  Is this not correct?  Last year it was returned saying they needed more info.  I sent it the entire tax return and haven't heard back from them. I had called them and they said they didn't know why it was returned.

[AmyC · Accepted solution]

Q1. Yes, 2017 was the beginning of calculations.

Q2. Any forms submitted without the correct basis should be corrected. Since you forgot the IRA existed, I don't know that you can go back and correct forms without the account information.

Q3. You are very impressive to be filing this each year on your own. Great job doing the right thing!

That is odd for the IRS to return the  8606. At the end of the day, all you can do is your best and keep records to help explain any discrepancies.

[aalinda01]

Thank you!  I now have all the info I need back to 2017 to amend all the form 8606's and bring the basis to the correct amount.  I will include a worksheet with all the years summarized.  Since I never had and taxable income, I am only planning to send a 1040X and a corrected 8606.  Do you think I need to included the 1040's also?

Thank you.

[AmyC]

The 8606 should stand on its own. I would just mail the form and write amended on the top of it in big red letters or highlighted. Mailing an amended 1040x form might cause more confusion but that is up to you. I certainly understand after last year's mess! They can always ask you for more information. I think a cover letter saying it is corrected for an account you had forgotten makes more sense.