nadiaibrahim[at]hotmail.com (Nadia) writes:

- quote -

Nitpick -- there is no such thing as a "nondeductible IRA".
Rather, there are traditional IRAs that one has made
nondeductible contributions to.

Anyways, in the context of traditional IRAs, "basis"
means the total remaining nondeductible contributions
in all your trad IRA accounts. Obviously, if you've
never made a trad IRA withdrawal, that will be the sum
of all nondeductible contributions you have ever made
to any/all of your trad IRA accounts.

In years where you made no contributions to *any* trad
IRA account and took no withdrawals from *any* trad IRA
account, there's nothing to report. But when you get
a chance, you should go back and figure out your "basis",
because you'll need it when you one day do take withdrawals
from any of your trad IRA accounts.

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

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nadiaibrahim[at]hotmail.com posted:

- quote -

No. This refers to the total of your *contributions* to the
Nondeductible IRA.

- quote -

Actually, you should have filed a Form 8606 for the years
when you were contributing funds to the Nondeductible IRA.
If you've saved a copy of your tax filings, just dig those
out -- or maybe just the last one, since they are
cumulative. This total of your nondeductible contributions
is your "basis."

- quote -

The time when this will become an important issue, is when
you begin taking distributions -- and then, you will be
happy you kept your records up to date. That's what the
software was prompting you to do, I suspect.

Hope this helps.

Bill

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nadiaibrahim[at]hotmail.com (Nadia) wrote:

- quote -

There's no such thing as a "non-deductible IRA".
Deductibility applies to contributions, not the account.

- quote -

If you've never withdrawn anything, the basis is simply the
total non-deductible contributions that were made to the
account. Once you start withdrawing, the basis is reduced
by prorating the redemption between deductible and
non-deductible contributions (Form 8606 calculates this).

--
Barry Margolin, barmar[at]alum.mit.edu
Arlington, MA

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I have a Nondeductible IRA, that I have not contributed to
for 7years at least and have not withdrawn any funds. As I
was doing my taxes for 2003, the question regarding
Traditional IRA came up" Basis"?

Does that mean if I had any activity in the account? Do I
have to go back to my records and calculate what I have
contributed in the past and minus it from the present value
of my Traditional IRA?

I left it blank and completed my tax reporting/filing.

Your answer will be very much appreciated , so I can be more
prepared for an Audit( God forbid!!) or for filing next
year.

Thank you.

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