Form 8606

GaryEKruse · ‎February 09, 2026

I have a small amount of non-taxable funds in my IRA. I have met all RMD requirements. When I enter the value of all my IRAs on Line 7 of Form 8606, the expected return amount goes down. I cannot understand why that would happen since the carryover of the basis entered on line 6 comes from the previous year taxes. My expected return goes down by about a third of the basis. I cannot understand why that happens. Thank you for any comment you may have to educate me.

ReneV4

Your expected return amount may be going down due to how the IRS mandates that distributions be taxed.

As long as you have any pre-tax money in any Traditional IRA, you are forced to "pro-rate" your basis over time.

If your basis is a small percentage of the total value of all of your IRAs, then a smaller percentage of your RMD will be tax-free.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

GaryEKruse

Thank you for the explanation. Looking back at previous returns I find that not only did I pay taxes originally on that money, but in the last six years I have paid more in extra taxes than the value of the contributions. So it is a complete loss. Live and learn.