Form 8606 - Value to use for Line 6 Total IRAs

[2018azres]

I started receiving fixed income payments from my IRA annuity in 2020.  I am 67 years old.  I also withdrew funds from my Traditional IRA.  Since my Traditional IRA includes nondeductible contributions that were made for a few years in the early 2000s I am filling out form 8606 to determine the taxable and nontaxable portions of my 2020 IRA income.  I was able to enter all the needed information from my old 8606 form that represented the sum total of my nondeductible contributions - no problem since I submitted the required forms at the time.  My dilemma is what value to include on line 6 of form 8606 (or in response to the same question asked by the TurboTax program that fills out the form for me)--that is: Enter the value of all your traditional, SEP, and SIMPLE IRAs in 2020. Seems like a simple question.  I know what to plug in for my Traditional IRA.  But what value should I add in for my annuitized IRA annuity?  The amount I paid for it?  Or the value from form 5498 that the insurance company is sending to the IRS that is much larger than what I paid for it?  The annuity is a guaranteed lifetime income for 2 that I bought in 2014.  Payment were deferred to 2020.  My payments are fixed for life.  The value on form 5498 does not represent income I will ever receive. Or do I need to add the IRA annuity balance at all?

Any thoughts would be appreciated.

[DanaB27]

Yes, you will have include a value for your annuitized IRA annuity for the question "Enter the value of all your traditional, SEP, and SIMPLE IRAs in 2020".

If the custodians of IRA annuities provides you with a year-end value for the IRA annuity then use that. If not, then value the annuity one of two ways, either at the price of a new annuity that would provide the same terms and payout, or by using the calculation of the present value the annuity for estate tax purposes.