IRA Cost Basis

Forum|Forum|1 year ago
March 20, 2025
2 replies
26 views

Hello,

I took a voluntary withdrawl from my IRA during 2024. I made AFTER TAX contributions to this IRA. I also made some AFTER TAX contributions in the past to my 401K in a different account. How do I determine my tax basis in the withdrawl. Do I combine the AFTER TAX contributions from both the tax deferred accounts or use only the after tax contributions to my IRA, the account I took the withdrawl from. In other words, is my 401K tax basis a factor at all if I took an IRA distribution.

THANKS SO MUCH FOR THE HELP!

AnnetteB6

Level 15

No, the 401k tax basis is not a factor. If the 401k is still a 401k and has not been rolled into an IRA, then it is not considered when determining the basis of your IRA account.

Use only the after-tax contributions made to the IRA.

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dmertz

Level 15

The after-tax funds only add to you basis in nondeductible traditional IRA contributions if you roll the 401(k) over to a traditional IRA. Otherwise, the after-tax funds in your 401(k) have no bearing on your distributions from your traditional IRAs because a 401(k) is not an IRA.