IRS Form 8606, line 6--HELP!
Q.I've been calling the IRS help line but it's always busy. Could someone tell me what to put on line 6 of 8606 (Nondeductible IRAs) if I took all the money out of my IRAs in 1994 so the balance in the IRAs on 12/31/94 was zero? I've entered 00.00 but then this gives me a Basis (on lines 11 and 12) of $52.78 which is obviously not right for me. In reality the basis should be around $11,000. Also I did not know that I had to fill out Form 8606 each year I deposited nondeductible contributions into my IRAs. Is it too late to file a correction for those years, since I've already withdrawn all the proceeds from the IRAs? Thanks.
A.You need to do 8606s for each year you placed money into a non-deductible IRA or the IRS will look at ALL the withdrawn money as taxable. Your basis, on line 12 is zero if you withdrew all the money.
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