Help with Form 8606

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Help with Form 8606

Postby joppy » Tue Apr 02, 2013 11:12 pm

Before Roth IRAs existed, I contributed to traditional IRAs. When Roth IRAs were created, I converted all my traditional IRAs to Roth IRAs (late 90s). This year I made a traditional IRA contribution and am filling out Form 8606. What should I enter as my "total basis" in traditional IRAs? Should this value be 0, since I no longer have any traditional IRAs except this new one I am just creating?

Or do I need to somehow dig up old tax returns from the late 90s to find the last Form 8606, in which I did my Roth conversions?

Thanks,
Joppy
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Re: Help with Form 8606

Postby Duckie » Tue Apr 02, 2013 11:56 pm

When you say "this year" do you mean for 2012? Was this deductible or non-deductible? You didn't specify.

If you made a non-deductible contribution to this new traditional IRA for 2012 (and have no other non-Roth IRAs), line 3 (the total basis) will be 0 on Form 8606. You only need to fill out lines 1-3 and 14. Line 14 will go on line 2 next year.

If you made a deductible contribution you don't have to file Form 8606. You just put the contribution on line 32 of Form 1040.
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Re: Help with Form 8606

Postby umfundi » Wed Apr 03, 2013 3:24 am

Duckie wrote:When you say "this year" do you mean for 2012? Was this deductible or non-deductible? You didn't specify.

If you made a non-deductible contribution to this new traditional IRA for 2012 (and have no other non-Roth IRAs), line 3 (the total basis) will be 0 on Form 8606. You only need to fill out lines 1-3 and 14. Line 14 will go on line 2 next year.

If you made a deductible contribution you don't have to file Form 8606. You just put the contribution on line 32 of Form 1040.

Once you have ever had to file an 8606, I think it is a good idea to keep it current and file it every year. Whether you are required to or not.

Keith
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Re: Help with Form 8606

Postby Epsilon Delta » Wed Apr 03, 2013 4:44 pm

joppy wrote:Before Roth IRAs existed, I contributed to traditional IRAs. When Roth IRAs were created, I converted all my traditional IRAs to Roth IRAs (late 90s). This year I made a traditional IRA contribution and am filling out Form 8606. What should I enter as my "total basis" in traditional IRAs? Should this value be 0, since I no longer have any traditional IRAs except this new one I am just creating?

Or do I need to somehow dig up old tax returns from the late 90s to find the last Form 8606, in which I did my Roth conversions?

Thanks,
Joppy

Assuming you converted all your traditional IRAs and did not open another traditional IRA before Dec 31 of the year of the conversion you should have used up all your basis when you did the conversion in the late 90's. If this is your first contribution to a traditional IRA since then your carry over basis on line 2 of form 8606 is indeed zero.

So if you think you did it right in the 90's you can use zero with confidence. If you think you did it wrong in the 90's you can still use zero and maybe pay a little too much tax later.
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Re: Help with Form 8606

Postby joppy » Fri Apr 05, 2013 9:05 pm

I am pretty sure I reported the Roth conversion correctly. I am going to use a prior basis of 0.

Thanks everyone.

- Joppy
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