Is there any reason to track the basis of Roth IRAs and Traditional IRAs if we are older than 59 1/2 and also our IRAS are all older than 5 years?
I just updated the Roth IRA basis to be accurate, since there was an entry missed in the past. I would also update the traditional IRA basis if there is a good reason to do so. I first need to figure out if the basis of the total of Traditional IRA contributions gets reduced by the amount of Roth conversions. If that is the case it will be easy to subtract that amount to determine the basis of the Traditional IRA. Also I would need to determine if a 401(k) rolled into the Traditional IRA needs to be added to the basis.
maybe, when you start RMDs if you have tax basis (non-deductible amounts reported on form 8606) a portion will be nontaxable.
You once could take a loss on your IRA plans if you cashed out all your IRAs of the same type—traditional IRAs or Roths. That tax loophole ended with the 2018 tax year. That law expires in 2025. No one knows if it will be extended.
Basis in nondeductible traditional IRA contributions must always be tracked.
As Mike9241 indicated, tracking basis in Roth IRA contributions and conversions after you meet the requirements for qualified Roth IRA distribution might be useful if your Roth IRAs lose value such that you have unrecoverable basis if you completely drain your Roth IRAs after 2025 when miscellaneous deductions subject to the 2%-of-AGI floor are scheduled to be reinstated.
I don't believe that we have any basis in nondeductible traditional IRA contributions. In other words, all traditional IRA contributions spouse & I have made over the years have been deductible. Right now when I look at the TurboTax IRA Information Worksheet it shows no amounts for taxpayer and spouse in Part I Traditional IRA section.
Part II Roth IRA has the proper amounts. (I recently updated according to advice from danab27 on how to do so since I hadn't distinguished Roth conversions from Traditional withdrawals one year. https://ttlc.intuit.com/community/taxes/discussion/re-ira-information-worksheet-i-didn-t-enter-roth-conversion-correctly-in-2022-how-do-i-correc/01/3334337#M1228265)
Part III Traditional IRA Basis Detail shows no amounts.
Part IV Traditional IRA Year-end Value Detail shows no amounts.
Part V Roth IRA Contribution and Conversion Balances shows proper amounts.
Part VI Roth IRA Basis Adjustments shows no amounts.
In an external spreadsheet I have painstakingly documented all Traditional contributions and all Roth contributions and conversions. The TurboTax IRA Information Worksheet, at this point, seems to now have the accurate Roth amounts listed, and nothing listed for Traditional Basis. Therefore I believe our IRA information is correctly documented. Does that sound correct?