Sent RMD Back Non-Deductible IRA Form 8606

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Topic Author
Leesbro63
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Joined: Mon Nov 08, 2010 4:36 pm

Sent RMD Back Non-Deductible IRA Form 8606

Post by Leesbro63 » Tue Jun 30, 2020 12:27 pm

Just thinking out loud early on. I do my mother's income tax preparation and she has a non-deductible IRA that requires an annual form 8606. This year she took her RMD in February and returned it (rolled it back) in April. What will be the ramifications for reporting on form 8606?

Alan S.
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Location: Prescott, AZ

Re: Sent RMD Back Non-Deductible IRA Form 8606

Post by Alan S. » Tue Jun 30, 2020 1:59 pm

Leesbro63 wrote:
Tue Jun 30, 2020 12:27 pm
Just thinking out loud early on. I do my mother's income tax preparation and she has a non-deductible IRA that requires an annual form 8606. This year she took her RMD in February and returned it (rolled it back) in April. What will be the ramifications for reporting on form 8606?
None. If she rolled back all her TIRA distributions this year, did not make a new ND contribution, and did not convert or take a Roth distribution, Form 8606 won't apply to her 2020 return. You would just show the distribution on line 4a, 4b will be blank and "rollover" shown next to 4b.

kaneohe
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Re: Sent RMD Back Non-Deductible IRA Form 8606

Post by kaneohe » Tue Jun 30, 2020 2:04 pm

here is part of the line 7 instruction from the form: Guessing that you won't have to fill out the form if everything was rolled back.

7 Enter your distributions from traditional, SEP, and SIMPLE IRAs in 2019. Do
not include rollovers

Topic Author
Leesbro63
Posts: 6573
Joined: Mon Nov 08, 2010 4:36 pm

Re: Sent RMD Back Non-Deductible IRA Form 8606

Post by Leesbro63 » Tue Jun 30, 2020 2:05 pm

Alan S. wrote:
Tue Jun 30, 2020 1:59 pm
Leesbro63 wrote:
Tue Jun 30, 2020 12:27 pm
Just thinking out loud early on. I do my mother's income tax preparation and she has a non-deductible IRA that requires an annual form 8606. This year she took her RMD in February and returned it (rolled it back) in April. What will be the ramifications for reporting on form 8606?
None. If she rolled back all her TIRA distributions this year, did not make a new ND contribution, and did not convert or take a Roth distribution, Form 8606 won't apply to her 2020 return. You would just show the distribution on line 4a, 4b will be blank and "rollover" shown next to 4b.
But because it’s a non-deductible IRA with a basis, isn’t an 8606 required to carry that basis from 2019 through to 2021?

Alan S.
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Joined: Mon May 16, 2011 6:07 pm
Location: Prescott, AZ

Re: Sent RMD Back Non-Deductible IRA Form 8606

Post by Alan S. » Tue Jun 30, 2020 2:38 pm

No. Basis from the last 8606 filed (Part I) carries forward until it changes due to a contribution or distribution. Someone could have no such activity for a decade and then if they take a distribution they will have to locate the last 8606 they filed to pick up the basis from line 14 and enter it on line 2 of the distribution year.

kaneohe
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Re: Sent RMD Back Non-Deductible IRA Form 8606

Post by kaneohe » Tue Jun 30, 2020 3:07 pm

here are instructions that are on the form:

Part I Nondeductible Contributions to Traditional IRAs and Distributions From Traditional, SEP, and SIMPLE IRAs
Complete this part only if one or more of the following apply.
• You made nondeductible contributions to a traditional IRA for 2019.
• You took distributions from a traditional, SEP, or SIMPLE IRA in 2019 and you made nondeductible contributions to a
traditional IRA in 2019 or an earlier year. For this purpose, a distribution does not include a rollover (other than a
repayment of a qualified disaster distribution (see 2019 Forms 8915-C and 8915-D)), qualified charitable distribution,
one-time distribution to fund an HSA, conversion, recharacterization, or return of certain contributions.
• You converted part, but not all, of your traditional, SEP, and SIMPLE IRAs to Roth IRAs in 2019 and you made
nondeductible contributions to a traditional IRA in 2019 or an earlier year
Last edited by kaneohe on Tue Jun 30, 2020 3:57 pm, edited 1 time in total.

Topic Author
Leesbro63
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Joined: Mon Nov 08, 2010 4:36 pm

Re: Sent RMD Back Non-Deductible IRA Form 8606

Post by Leesbro63 » Tue Jun 30, 2020 3:45 pm

Alan S. wrote:
Tue Jun 30, 2020 2:38 pm
No. Basis from the last 8606 filed (Part I) carries forward until it changes due to a contribution or distribution. Someone could have no such activity for a decade and then if they take a distribution they will have to locate the last 8606 they filed to pick up the basis from line 14 and enter it on line 2 of the distribution year.
Excellent information. I learned something new here. Thank you Alan S.

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