Instructions For Form 8606 - Nondeductible Iras

would otherwise enter on line 6. If the

you or your spouse. If this transfer

Line 4

result is zero or less, enter -0-.

results in a change in the basis of the

If you made contributions to traditional

traditional IRA of either spouse, both

Example. You received a $30,000

IRAs for 2009 in 2009 and 2010 and

spouses must file Form 8606 and show

qualified disaster recovery assistance

you have both deductible and

the increase or decrease in the amount

distribution on August 18, 2009, from

nondeductible contributions, you can

of basis on line 2. Attach a statement

your traditional IRA. On December 15,

choose to treat the contributions made

explaining this adjustment. Include in

2009, you made a repayment of

in 2009 first as nondeductible

the statement the character of the

$15,000 to your traditional IRA. The

contributions and then as deductible

amounts in the traditional IRA, such as

value of all your traditional, SEP, and

contributions, or vice versa. But the

the amount attributable to

SIMPLE IRAs as of December 31,

amount on line 4 cannot be less than

nondeductible contributions. Also,

2009, was $50,000. You had no

the excess, if any, of the amount on line

include the name and social security

outstanding rollovers. You would enter

1 over the contributions you actually

number of the other spouse.

$35,000 ($50,000 minus the $15,000

made in 2009.

repayment) on line 6.

Qualified disaster recovery

Example. You made contributions

assistance distributions. Be sure to

for 2009 of $2,000 in May 2009 and

Line 7

include on line 7, all qualified disaster

$2,000 in January 2010, of which

recovery assistance distributions you

$3,000 are deductible and $1,000 are

If you received a distribution in

received, even if they were later repaid.

nondeductible. You choose $1,000 of

2009 from a traditional, SEP, or

your contribution in 2009 to be

SIMPLE IRA, and you also

CAUTION

nondeductible. You enter the $1,000 on

Line 8

made contributions for 2009 to a

line 1, but not line 4, and it becomes

traditional IRA that may not be fully

If, in 2009, you converted any amounts

part of your basis for 2009.

deductible because of the income

from traditional, SEP, or SIMPLE IRAs

Although the contributions to

limits, you must make a special

to a Roth IRA, enter on line 8 the net

traditional IRAs for 2009 that you made

computation before completing the rest

amount you converted. To figure that

from January 1, 2010, through April 15,

of this form. For details, including how

amount, subtract from the total amount

2010, can be treated as nondeductible,

to complete Form 8606, see Are

converted in 2009 any portion that you

they are not included in figuring the

Distributions Taxable? in chapter 1 of

recharacterized back to traditional,

nontaxable part of any distributions you

Pub. 590.

SEP, or SIMPLE IRAs in 2009 or 2010

received in 2009.

(see Recharacterizations that begins on

Do not include any of the following

page 3). Do not take into account

on line 7.

Line 6

•

related earnings that were transferred

Distributions that you converted to a

Enter the total value of all your

with the recharacterized amount or any

Roth IRA.

traditional, SEP, and SIMPLE IRAs as

•

loss that occurred while the amount

Recharacterizations.

of December 31, 2009, plus any

•

was in the Roth IRA. See item 1 under

Distributions that you rolled over by

outstanding rollovers. A statement

Reporting recharacterizations on

December 31, 2009, and any

should be sent to you by January 31,

page 3 for details.

outstanding rollovers included on

2010, showing the value of each IRA

line 6.

on December 31, 2009. However, if you

•

Line 15b

Distributions you rolled over to a

recharacterized any amounts, enter on

qualified employer plan.

If all your distributions are qualified

line 6 the total value taking into account

•

A one-time distribution to fund an

disaster recovery assistance

all recharacterizations, including

HSA. For details, see Pub. 969, Health

distributions, enter the amount from line

recharacterizations made after

Savings Accounts and Other

15a on line 15b. If you have

December 31, 2009.

Tax-Favored Health Plans.

distributions unrelated to the

•

For line 6, a rollover is a tax-free

Qualified charitable distributions. For

Midwestern severe storms, tornadoes,

distribution from one traditional, SEP, or

details, see the instructions for Form

or flooding, as well as qualified disaster

SIMPLE IRA that is contributed to

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

recovery assistance distributions, you

another traditional, SEP, or SIMPLE

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

will need to multiply the amount on line

IRA. The rollover must be completed

lines 16a and 16b.

15a by a fraction. The numerator of the

•

within 60 days of receiving the

Distributions that are treated as a

fraction is your total qualified disaster

distribution from the first IRA. An

return of contributions under Return of

recovery assistance distributions. The

outstanding rollover is any amount

IRA Contributions on page 4.

denominator of the fraction is the

•

distributed in 2009 after November 1,

Distributions that are treated as a

amount from Form 8606, line 7. See

2009, that was rolled over in 2010, but

return of excess contributions under

the example below.

within the 60-day rollover period.

Return of Excess Traditional IRA

Contributions on page 4.

Example. You received a

The IRS may waive the 60-day

•

Distributions of excess contributions

distribution from your traditional IRA

requirement if failing to waive it would

due to incorrect rollover information. If

(that you did not roll over) in the

be against equity or good conscience,

an excess contribution in your

amount of $30,000 on April 1, 2009,

such as situations where a casualty,

traditional IRA is the result of a rollover

unrelated to the severe storms,

disaster, or other events beyond your

from a qualified retirement plan and the

tornadoes, or flooding in the

reasonable control prevented you from

excess occurred because the

Midwestern disaster areas. On August

meeting the 60-day requirement. Also,

information the plan was required to

18, 2009, you received a qualified

the 60-day period may be extended if

give you was incorrect, the distribution

disaster recovery assistance

you had a frozen deposit. See Pub. 590

of the excess contribution is not

distribution (as a result of the severe

for details.

taxable. Attach a statement to your

storms, tornadoes, or flooding in a

Note. Do not include a rollover from a

return explaining the distribution and

Midwestern disaster area) from your

traditional or SEP IRA to a qualified

include the amount of the distribution

traditional IRA in the amount of

employer plan even if it was an

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

$10,000. You would report $40,000 on

outstanding rollover.

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

Form 8606, line 7. You would then

Repayments of qualified disaster

See Pub. 590 for more details.

complete lines 8 through 14 as

•

recovery assistance distributions.

Distributions that are incident to

instructed. Form 8606, line 15a shows

Subtract the total amount of

divorce. The transfer of part or all of

an amount of $36,000. You would enter

repayments of qualified disaster

your traditional, SEP, or SIMPLE IRA to

$9,000 ($36,000 x $10,000/$40,000) on

recovery assistance distributions you

your spouse under a divorce or

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

made in 2009 from the amount you

separation agreement is not taxable to

on Form 8930, line 22.

-6-

Instructions for Form 8606 (2009)

Instructions For Form 8606 - Nondeductible Iras - 2009 Page 6

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