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Redd55
Returning Member

Tradition IRA and Regular IRA withdraw


I am 67, I have withdrawn money from my traditional IRA (Nondeductible account) and did an 8606 form. this Ira has been tracking since the 1990's. I also withdrawn from money from a regular IRA in which is fully taxable. I received 1099-r form the same bank. when I do TurboTax, it is adding both on my 8606 make this wrong. Is there another place or form for the regular IRA?

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3 Replies

Tradition IRA and Regular IRA withdraw

traditional IRA regular IRA

These are just two terms for the same thing.
As far as IRS is concerned you only have one IRA even if it is spread among various custodians.

see the notation on 8606 Line 6.

 

If you ever inherit an IRA, that must be kept separate.

Tradition IRA and Regular IRA withdraw

say you have an IRA to which you only made nondeductible contributions and another iRA where you only made deductible contributions. you take money out of only the Nondeductible IRA. 

the IRS says you took a proportional amount out of both the nondeductible and the deductible IRA making some of the distribution taxable 

 

 

ThomasM125
Expert Alumni

Tradition IRA and Regular IRA withdraw

If you had distributions of non-deducted IRA contributions, all of your distributions for that year from traditional IRA's will appear on form 8606, that is the way the form works. Line 7 says Enter your distributions from traditional IRA's, it doesn't mention excluding distributions that are taxable. 

 

You enter both form 1099-R's in the same place in TurboTax. The codes on the form and answers to the questions dictate how the distribution is reported on your tax return.

 

For a traditional IRA with deducted contributions, you would usually see code 7 in box 7 (normal distribution) and the taxable portion may be listed in box 2(a) on your form 1099-R but sometimes not.

 

You will be asked if you transferred or rolled the distribution to another IRA, which you need to say "no" to. You will also be asked if you had any nondeductible contributions to the IRA, and you have to answer no to that. Then that distribution will be shown as taxable on your tax return.

 

The form 8606 will determine what amount is taxable from your distribution from your IRA that has non-deducted contributions.

 

 

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