IRA Cost Basis

[akrichard]

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]

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.

[dmertz]

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.