In this video we’re answering the question “How do I calculate my basis in my IRA for IRS form 8606??” The White Coat Investor wants to help you stop doing dumb things with your money, so in this video series we answer questions you have submitted.
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00:00 How do I calculate my basis in my IRA for IRS form 8606?
00:17 Cost basis defined
00:36 Form 8606 Line 2
01:29 Making a late backdoor Roth contribution…(read more)
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So glad this is a top Google result. It's hard to find an answer online about this!
Watch out for the IRA aggregation rule if you have additional traditional IRAs, SEP IRAs, or SIMPLE IRAs.
Hello,
I contributed $6500 to my 2021tax year traditional IRA in September 2021. It is non-deductible. This is the first time I have made a non-deductible IRA contribution. Would I put $0 on line #2 of form 8606? Thank you
@The White Coat Investor Great video. I have a question: If I convert $15,000 from a Traditional IRA into a Roth IRA last year, and I am converting another $20,000 this year, what do I put for my basis on line 17 of Part II?
hey quick question for you … In 2020 I did my taxes on turbotax online, I initially deposited $6000 into my traditional IRA, however when I did the conversion I had a loss of $7 so I could only convert $5993. When turbotax completed my form 8606, Line number 14 gave me a "basis" of 7 dollars which doesn't make sense because that $7 was a loss and it's not my "basis" to carry over to next year. Do I carry over that $7 onto my 8606 for 2022 onto line 2? Thank you in advance and I hope that made sense to you
Thank you! This is the only place on the internet that answers this question!
the confusing item is #24 in Part III, "basis in conversion from traditional IRA and rollover to Roth". If you doing back door conversion, this basis should increase by 6k per year, right?
why would you care about basis in conversion to Roth? since eventually all roth distribution are tax free. If for some unseen emergency you need to prematurely take out funds from your Roth, you can withdraw up to your basis without penalty.