Instructions For Form 8606 - Nondeductible Iras

a Roth IRA, complete lines 14a

Worksheet for Lines 20b and 20c

through 14c as follows. Enter on line

1 Enter the amount from your 1998 Form 8606, line 16

14a the total of all amounts converted

Enter one-half of line 1 above

in 2000. Enter on line 14b the portion

of any amount on line 14a that you

Enter the amount, if any, from your 1998 Form 8606, line 22

recharacterized in 2000, or in 2001

Enter the amount, if any, from your 1999 Form 8606, line 21

by the due date of your tax return,

Add lines 2 through 4. Enter here and on Form 8606, line 20b

including extensions. Do not include

6 Subtract line 5 from line 1

on line 14b related earnings that were

Enter one-half of line 2 above

transferred with the recharacterized

Enter the smaller of line 6 or line 7 here and on Form 8606,

amount or reduce the amount on line

line 20c

14b if the amount transferred was

less because of a loss that occurred

include excess contributions that

Line 18b

while the amount was in the Roth

were distributed (returned to you) with

Do not include on line 18b excess

IRA. See the earlier example for

the related earnings (or less any loss)

contributions that were distributed

details.

by the due date of your tax return,

(returned to you) with the related

including extensions. You may not

Line 15

earnings (or less any loss) by the due

deduct any loss that occurred. Include

date of your tax return, including

If you completed line 9, multiply line

any related earnings in income for the

extensions. See the instructions for

9 by line 14c and enter the result.

year in which you made the

line 17.

Otherwise, enter the amount from line

contribution. For contributions made

2 (or the amount you would have

in 2000, report the total amount

Line 18c

entered on line 2 if you had

withdrawn on line 15a and any

Example of a contribution to a

completed Part I) plus any

earnings on line 15b if filing Form

traditional IRA recharacterized to a

contributions included on line 1 that

1040; lines 11a and 11b if filing Form

Roth IRA. On July 9, 2000, Ellen

were made before the conversion.

1040A; or lines 16a and 16b if filing

contributed $2,000 to a traditional

Form 1040NR. Also see Form 5329

IRA. On April 10, 2001, she

Part III—Distributions

if you were under age 59

at the time

recharacterized the contribution

From Roth IRAs

of a distribution with related earnings.

(which was then worth $1,500) to a

Withdrawn excess contributions are

Roth IRA. Ellen enters -0- on line 18b

Complete Part III to figure the taxable

treated as if they were never

and $2,000 (not $1,500) on line 18c.

part of your 2000 Roth IRA

contributed for purposes of figuring

distributions (or to report

Example of a contribution to a

basis and therefore are not reported

recharacterized contributions).

Roth IRA recharacterized to a

on Form 8606.

Distributions from Roth IRAs are

traditional IRA. On June 14, 2000,

applied in the following order.

Steven contributed $2,000 to a Roth

Line 18a

IRA. On March 13, 2001, he

1. Roth IRA contributions. These

Figure the amount to enter on line

recharacterized the contribution

amounts represent a return of your

18a as follows.

(which was then worth $2,500) to a

basis (amounts you contributed) and

1. Figure the excess of your Roth

traditional IRA. Steven enters $2,000

are not taxable upon distribution. This

IRA contributions for 1998 (including

on line 18b and $2,000 as a negative

amount is figured on line 18d.

contributions made in 1999 for 1998),

amount (not $2,500) on line 18c.

2. Accelerated income inclusion.

adjusted for any recharacterizations,

If, in 1998, you converted amounts

Lines 20b and 20c

over the amount of any Roth IRA

from a traditional IRA to a Roth IRA

distributions you made in 1998.

Complete the worksheet on this page

and are reporting the taxable amount

2. Add the amount figured in 1

to figure the amount to enter on lines

over 4 years, the amount you must

above and your Roth IRA

20b and 20c. Line 20a shows the total

include in income for 2000 may be

contributions for 1999 (including

portion of your 1998 Roth IRA

more than one-fourth of the taxable

contributions made in 2000 for 1999).

conversion that is taxable over 4

amount. The accelerated income is

years. The amount figured for line

3. Figure the excess of the

figured on line 21.

20b is the portion of line 20a that was

amount figured in 2 above over the

3. Amounts converted from

amount of any Roth IRA distributions

taxable in 1998 and 1999. The

traditional or SIMPLE IRAs to Roth

amount figured for line 20c is the

you made in 1999. Enter the result

IRAs. These amounts represent a

portion of line 20a that is taxable for

on line 18a. This is your basis in Roth

return of basis and are not included

2000 without regard to any 2000 Roth

IRA contributions for 1998 and 1999.

in gross income upon distribution.

IRA distribution. Any remaining

If you completed Part III of Form

4. Earnings. Any remaining

portion of line 20a is taxed in 2000

8606 for 1999, you can find the

amount is earnings, which are taxable

on line 21 to the extent of any

amount to enter by figuring the

because the distribution is not a

remaining distribution on line 19.

excess of line 18d of that Form 8606

qualified distribution (see page 2).

If the owner of a Roth IRA died in

over line 17 of that Form 8606. This

2000, the entire excess of line 20a

Line 17

amount can also be found on line 5

of the Roth IRA Basis Worksheet

over line 20b generally must be

Do not include on line 17 distributions

included in income in 2000. However,

on page 6 of your 1999 Instructions

that were rolled over to another Roth

a surviving spouse may be able to

for Form 8606.

IRA within 60 days. Also, do not

elect to continue reporting the taxable

Page 6

Instructions For Form 8606 - Nondeductible Iras - 2000 Page 6

Related Articles

Related forms

Related Categories