Roth IRA Withdrawal Basis Calculation

[mjcouche]

Hello,

I have always done my taxes with TurboTax. In the early 2000s my father opened a custodial Roth IRA account for me with Vanguard. This account passed to me in 2014. Unfortunately, I am not able to determine the contributions amount in order to take an early withdrawal with no penalty. Vanguard has said they do not track the contributions, and are unable to figure it out. I do not have Form 5498 for the years that contributions were made. How can I go about making an "educated guess" on what my contributions were? Or should I call the IRS to see what their records are, as Vanguard said they sent a Form 5498 each year to the IRS? I would like to make a withdrawal soon, and make the correct withdrawal amount without any sort of penalty. Thanks in advance for your help.

[dmertz]

[Deleted]

[dmertz]

It's your responsibility to have tracked the basis of contributions made to your Roth IRA on your behalf.  These would have been reported on Forms 5498 and absent other records that's likely the only place where you would be able to find that information.  The IRS will be able to provide you with Wage & Income transcripts showing more recent contributions, but you'll probably not be able to get ones going back more than 10 years.

If the funds are to be used for a first-home purchase, because you've had the Roth IRA more than 5 years up to $10,000 to be used for the purchase can be taken out free of tax and penalty without knowing your contribution basis, although line 22 of Form 8606 is still supposed to show your contribution basis.

[Bsch4477]

If Dad is alive ask if he made the maximum allowable contribution each year and calculate it that way. Also ask Vanguard how far back you can get year end statements. 

[dmertz]

Good point.  Although Vanguard would not track a cumulative total, Vanguard had to have acknowledged the contributions so that they could properly prepare Forms 5498.  You could ask Vanguard how long they retain their copies of Forms 5498 and obtain copies of the ones they can provide.  (My IRA custodian retains copies for only 7 years.  Vanguard might be the same)

[mjcouche]

Yes, thank you. Vanguard has already told me as such. I need help making a ballpark estimate if I have a general contribution amount per year and current balance.

[mjcouche]

This is correct, they only have the past 7 years.

[NCperson]

@mjcouche - 

does your father have the Roth account statements going that far back sitting in the attic somewhere? you could figure out from that what the contributions were. 

are those 5498's sitting in his tax returns from those years? 

just ideas.

[dmertz]

Past Pubs 590 and 590-A provide the contribution limit for each year, so contributions would not be more than the limit (unless excess contributions subject to penalty were made):

https://www.irs.gov/prior-year-forms-and-instructions

It's not really a solution, but waiting until age 59½ to take from your Roth IRAs any more than the contribution basis that you do know about, if any, would avoid the problem of needing to know the exact basis.  The longer funds remain in the Roth IRA the more beneficial the Roth IRA is under the assumption that the Roth IRA will be invested in a way that produces gains.

Although your father might have retained the Forms 5498 on your behalf, they are part of your tax history, not his.

[cmgmrt]

To provide some general information, Fidelity seems to keep 10 years of statements (plus a month or so...), but only 7 years of tax forms.

I hope this might be helpful to a future reader of this thread.