Originally Posted by Alan
Interesting thread and raises a question I have. Both DW and I have a regular IRA that is composed only of non-deductible contributions, plus we each will have a roll-over IRA composed of deductible contributions from our 401k's.
When we start withdrawals in a few years are they treated differently for tax purposes? i.e. if we take a sum from a rollover IRA is the whole distribution taxed and if we take from a regular IRA is only the gains in that IRA taxed? Or is the total of all taxed contributions counted as one pool of money and withdrawals from any IRA treated in the same proportions for tax purposes?
All IRAs are assumed pooled together, as you suggest, even though you may be pulling from a particular IRA. This applies whether you are, e.g. doing a Roth conversion of a particular non-deductible IRA which you might assume might not cost much in taxes (but unfortunately may not be true) or withdrawing from that IRA.