In article <7eae4109-c531-4ad8-9ce4-0584607dbd8a[at]n36g2000hse.googlegroups.com> ,
Jane <googlemail2003[at]yahoo.com> wrote:
- quote -


You properly filed a form 8606 showing a $2000
nondeductible traditional IRA contribution.



So when you take any distriution from any traditional IRA or
convert any traditional IRA to a Roth, you again use the
Form 8606 plus the year end value of all tradtional IRAs to
figure how much of the distribution or conversion amount is
taxable.


I gave one example of how it would be used.



The nice thing is you do not have to know these rules.


You do not have to know the reasoning that determines
how much is taxable. Just continue to fill out form 8606 and
it will tell you a) how much of your distribution or conversion
is taxable, and b) your recalculated (undistributed) IRA Tax Basis.
--


ArtKamlet at a o l dot c o m Columbus OH K2PZH

--
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"Jane" wrote:

- quote -

There's an easy way to fix that problem. Fill out Part I of Form 8606. If
you have specific questions about specific lines on that form, post a
detailed question.

The way this "thread that would not die" is going we'll be looking at 2008
returns before verbiage alone satisfies you.

--
Phil Marti
Clarksburg, MD

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

On Mar 7, 10:38 pm, kam...[at]panix.com (Arthur Kamlet) wrote:
- quote -


In 2002 I retired. I had about $40k in a company pension fund (not a
401k). I rolled this into an IRA with Vanguard. I didn't pay any tax
so I realize that it's all taxable. That IRA and the $2000 bank CD
are the only non-ROTH IRAs that I have. The CD is now at about
$2300. So, if I put this $2300 into the ROTH what happens?

I looked back at my 2002 tax return and see that I filed an 8606 for
the $2000 but not for the $40k rollover. Was I supposed to?

========================================= MODERATOR'S COMMENT:
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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

In article <ad74dd61-ceca-4e7b-b4ab-07a5a9d133bd[at]2g2000hsn.googlegroups.com> ,
Jane <googlemail2003[at]yahoo.com> wrote:
- quote -

In order for 80 of your 2000 conversion (4%) to be nontaxable, 4% of
all your Traditional IRA year-end balances must be your IRA Basis, shown
on a prior year form 8606.


If the year end balance is 50,000, then the basis shown on form 8606
was 2000.


So after this conversion, your undistributed tax basis of the TIRA
shown on your new 8606 is 2000 - 80 = 1920.
--


ArtKamlet at a o l dot c o m Columbus OH K2PZH

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

"Jane" wrote:

- quote -

Only if the $2,000 is your only nondeductible contribution.

--
Phil Marti
Clarksburg, MD

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

On Mar 6, 6:42 pm, Mark Bole <ma...[at]pacbell.net> wrote:
- quote -

non ROTH IRA accounts. So, if I put the $2000 of the non-deductible
IRA into my ROTH only $80 will be non-taxable. Is that right?

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

On Mar 6, 6:42 pm, Mark Bole <ma...[at]pacbell.net> wrote:
- quote -

me that's as much tax confusion as I can handle.

========================================= MODERATOR'S COMMENT:
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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

Jane wrote:
- quote -

The non-deductible basis will be prorated across your total non-Roth IRA
balance. In other words, for tax purposes you can't specify that it is
just the CD that you want to convert.

Suppose you have $100K total IRA balance, and $2K basis
(non-deductible). If you convert $1K to Roth, of that amount $20 will
be non-taxable and $980 taxable.

Now, if in the same year you make the conversion, you also make a
deductible contribution and no other distributions, there's a worksheet
1-5 in Pub 590 that leads you to include a much higher percent of the
non-deductible basis in your conversion.

-Mark Bole

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

I have a traditional non-deductible IRA. It is currently in a bank CD
that is coming due. I opened it with $2,000 in 2003. I also have a
rollover IRA and a ROTH IRA, both with Vanguard.

I'd like to take the bank CD and put it in the ROTH. What will that
mean in taxes? I know I have to pay tax on the earnings but what
about the original $2,000? When I opened this IRA I filed form 8606
with my return.

thanks.

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >