Instructions For Form 8606 - Nondeductible Iras

•

For line 6, a rollover is a tax-free

Qualified charitable distributions. For

have distributions unrelated to

distribution from one traditional, SEP, or

details, see the instructions for Form

Hurricanes Katrina, Rita, and Wilma, as

SIMPLE IRA that is contributed to

1040, lines 15a and 15b; Form 1040A,

well as qualified hurricane distributions,

another traditional, SEP, or SIMPLE

lines 11a and 11b; or Form 1040NR,

you will need to multiply the amount on

IRA. The rollover must be completed

lines 16a and 16b.

line 15a by a fraction. The numerator of

•

within 60 days of receiving the

Distributions that are treated as a

the fraction is your total qualified

distribution from the first IRA. An

return of contributions under Return of

hurricane distributions and the

outstanding rollover is any amount

IRA Contributions on page 4.

denominator is the amount from Form

•

distributed after October 30, 2006, that

Distributions that are treated as a

8606, line 7. See the example below.

was rolled over in 2007, but within the

return of excess contributions under

Example. You received a

60-day rollover period.

Return of Excess Traditional IRA

distribution from your traditional IRA

Contributions on page 4.

(that you did not roll over) in the

The IRS may waive the 60-day

•

Distributions of excess contributions

amount of $30,000 on May 1, 2006,

requirement if failing to waive it would

due to incorrect rollover information. If

unrelated to Hurricane Katrina, Rita, or

be against equity or good conscience,

an excess contribution in your

Wilma. On October 15, 2006, you

such as situations where a casualty,

traditional IRA is the result of a rollover

received a qualified hurricane

disaster, or other events beyond your

from a qualified retirement plan and the

distribution (as the result of Hurricane

reasonable control prevented you from

excess occurred because the

Rita) from your traditional IRA in the

meeting the 60-day requirement. Also,

information the plan was required to

amount of $10,000. You would report

the 60-day period may be extended if

give you was incorrect, the distribution

total distributions of $40,000 on Form

you had a frozen deposit. See Pub. 590

of the excess contribution is not

8606, line 7. You would then complete

for details.

taxable. Attach a statement to your

lines 8 through 14 as instructed. Form

Note. Do not include a rollover from a

return explaining the distribution and

8606, line 15a, shows an amount of

traditional or SEP IRA to a qualified

include the amount of the distribution

$36,000. You would enter $9,000

employer plan even if it was an

on Form 1040, line 15a; Form 1040A,

($36,000 x $10,000/$40,000) on line

outstanding rollover.

line 11a; or Form 1040NR, line 16a.

15b. You would also enter $9,000 on

See Pub. 590 for more details.

Form 8915, line 22.

Repayments of qualified hurricane

•

Distributions that are incident to

distributions. Subtract the total

Line 15c

divorce. The transfer of part or all of

amount of repayments of qualified

your traditional, SEP, or SIMPLE IRA to

If you were under age 59

at the time

hurricane distributions you made in

your spouse under a divorce or

2006 from the amount you would

you received distributions from your

separation agreement is not taxable to

traditional, SEP, or SIMPLE IRA, there

otherwise enter on line 6. If the result is

you or your spouse. If this transfer

generally is an additional 10% tax on

zero or less, enter -0-.

results in a change in the basis of the

the portion of the distribution that is

Example. You received a $30,000

traditional IRA of either spouse, both

included in income (25% for a

qualified hurricane distribution (as the

spouses must file Form 8606 and show

distribution from a SIMPLE IRA during

result of Hurricane Katrina) on January

the increase or decrease in the amount

the first 2 years). See the Instructions

20, 2006, from your traditional IRA. On

of basis on line 2. Attach a statement

for Form 1040, line 60, or the

December 15, 2006, you made a

explaining this adjustment. Include in

Instructions for Form 1040NR, line 55.

repayment of $15,000 to your traditional

the statement the character of the

IRA. The value of all your traditional,

amounts in the traditional IRA, such as

Part II—2006

SEP, and SIMPLE IRAs as of

the amount attributable to

December 31, 2006, was $50,000. You

Conversions From

nondeductible contributions. Also,

had no outstanding rollovers. You

include the name and social security

Traditional, SEP, or

would enter $35,000 ($50,000 minus

number of the other spouse.

the $15,000 repayment) on line 6.

SIMPLE IRAs to Roth

Qualified hurricane distributions. Be

sure to include on line 7, all qualified

Line 7

IRAs

hurricane distributions you received,

even if they were later repaid.

Complete Part II if you converted part

If you received a distribution in

or all of your traditional, SEP, or

2006 from a traditional, SEP, or

Line 8

SIMPLE IRAs to a Roth IRA in 2006,

SIMPLE IRA, and you also

CAUTION

If, in 2006, you converted any amounts

excluding any portion you

made contributions for 2006 to a

from traditional, SEP, or SIMPLE IRAs

recharacterized. See item 1 under

traditional IRA that may not be fully

to a Roth IRA, enter on line 8 the net

Reporting recharacterizations on page

deductible because of the income

amount you converted. To figure that

3 for details.

limits, you must make a special

amount, subtract from the total amount

Limit on number of conversions. If

computation before completing the rest

converted in 2006 any portion that you

you converted an amount from a

of this form. For details, including how

recharacterized back to traditional,

traditional, SEP, or SIMPLE IRA to a

to complete Form 8606, see Are

SEP, or SIMPLE IRAs in 2006 or 2007

Roth IRA in 2006 and then

Distributions Taxable? in Chapter 1 of

(see Recharacterizations that begins on

recharacterized the amount back to a

Pub. 590.

page 3). Do not take into account

traditional, SEP, or SIMPLE IRA, you

Do not include any of the following

related earnings that were transferred

cannot reconvert that amount until the

on line 7.

with the recharacterized amount or any

later of January 1, 2007, or 30 days

•

Distributions that you converted to a

loss that occurred while the amount

after the recharacterization. See Pub.

Roth IRA.

was in the Roth IRA. See item 1 under

590 for details.

•

Recharacterizations.

Reporting recharacterizations on page

•

Distributions that you rolled over by

3 for details.

You cannot convert any amount

December 31, 2006, and any

to Roth IRAs in 2006 if (a) your

Line 15b

outstanding rollovers included on

modified AGI for Roth IRA

CAUTION

line 6.

If all your distributions are qualified

purposes (see page 2) is more than

•

Distributions you rolled over to a

hurricane distributions, enter the

$100,000, or (b) your filing status is

qualified employer plan.

amount from line 15a on line 15b. If you

married filing separately and you lived

-6-

Instructions For Form 8606 - Nondeductible Iras - 2006 Page 6

Related Articles

Related forms

Related Categories