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Form 8606 needed?
Old 01-30-2019, 10:57 PM   #1
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Form 8606 needed?

Next question, hopefully it's the last one for this year.

Last year when the CPA did my Dad's personal taxes, they filed a Form 8606. The only entries were in part III on lines 22 and 24, which show basis in Roth IRA contributions and basis in Roth IRA conversions.

My Dad is 82 and has had his Roth IRA for more than 5 years. He took a distribution from his Roth IRA in 2018 with a distribution code of Q, which I've dutifully reported on line 4a.

He's probably not going to do any more contributions, rollovers, conversions, recharacterizations or anything like that. He may take some distributions from his Roth IRA in future years to supplement his RMDs / SS / pension, but that's about it.

I don't know of any reason to file a Form 8606 with his tax return this year. In fact, the instructions seem to imply that it shouldn't be filed. Does it need to be filed, and if so, why?

Also, I don't know of any reason to continue to track these Roth basis items. Can anyone think of any?

Thanks!
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Old 01-31-2019, 06:25 AM   #2
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The age of your dad and the Roth IRA and the code Q mean that all distributions from the Roth are qualified so there is no need to track basis on the 8606. That Pt III is only to determine if some part of the withdrawal is taxable and those days are gone.
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Old 01-31-2019, 06:41 AM   #3
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This seems like a good starting point for understanding Form 8606.
https://turbotax.intuit.com/tax-tips...iras/L7iVxrgTs

What you should do, I do not have a suggestion.
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Old 01-31-2019, 08:29 AM   #4
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Quote:
Originally Posted by kaneohe View Post
The age of your dad and the Roth IRA and the code Q mean that all distributions from the Roth are qualified so there is no need to track basis on the 8606. That Pt III is only to determine if some part of the withdrawal is taxable and those days are gone.
Thanks.

It occurred to me last night that the basis might be inheritable and possibly useful when the Roth IRA is inherited and the beneficiaries must start RMDs, but a quick Google check suggests that isn't the case.
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Old 01-31-2019, 09:55 AM   #5
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Thanks.

It occurred to me last night that the basis might be inheritable and possibly useful when the Roth IRA is inherited and the beneficiaries must start RMDs, but a quick Google check suggests that isn't the case.
Not sure why you would need basis since the Roth is qualified already.
Pretty sure for a TIRA, the basis is inherited if you had non-deductible contributions so would be surprised if Roth were not the same if it were not yet qualified.
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Old 01-31-2019, 10:19 AM   #6
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Quote:
Originally Posted by kaneohe View Post
Not sure why you would need basis since the Roth is qualified already.
Right. I was agreeing with you on this point, but I was probably unclear.
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Originally Posted by kaneohe View Post
Pretty sure for a TIRA, the basis is inherited if you had non-deductible contributions so would be surprised if Roth were not the same if it were not yet qualified.
Fortunately for our situation, my Dad's tIRA and Roth IRA are both qualified, and his tIRA has zero basis as far as I know.

Thanks for the replies. I've decided to not bother filing the Form 8606 or track the basis any more.
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