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I have 4 IRA's, My first one that had both reportable and non-reportable contributions. I am 60 and taking distributions, I have a question about the fair market value

Forum|Forum|7 years ago
June 6, 2019
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I am 60 and started taking distributions from an old IRA that had no growth for several years. Since our income has decreased due to illness, it was decided to liquidate this particular IRA. I have 3 others, two are rollovers when I medically retired from my job and 1 I started just to have a future income. I had a stroke so if things look scattered they probably are. The problem that i am having is what do I need to report. I took distributions from my old IRA that had some rollover funds, and some reportable and non-reportable funds. When I am completing the turbo tax input the section where I reported my distributions also wants the fair market value of my IRA's. When I enter the amount on the 5498 for the IRA with the mixed funds my tax refund is reduced by more than $600, if I include the estimated fair market value of all my IRA's (no 5498's for the other three IRA's yet) it goes down by more than $900. I am confused. My IRA was roughly $27,000 and $6,040 is non-deductable contributions. Am I being penalized or what? I am very confused by this process. We do not have the money to pay a tax preparer and really need the money from this return so hope someone can assist.

TurboTax Premier Windows

Best answer by fanfare

it's very simple, all your Traditional, SEP and SIMPLE IRAs have to be lumped together and the value of each added together for a grand total year end value. ( I suggest you get the numbers from your December statements). There is no estimating. Use the value on Dec 31.

It sounds like you don't have SEP or SIMPLE IRAs, just traditional.

If you closed one in 2017, that one's contribution to the total is zero.

Tell TurboTax your basis of $6040. and what you took out during 2017 (that's your 1099-R) . TurboTax will do the calculations on Form 8606 for you.

fanfareAnswer

Employee

it's very simple, all your Traditional, SEP and SIMPLE IRAs have to be lumped together and the value of each added together for a grand total year end value. ( I suggest you get the numbers from your December statements). There is no estimating. Use the value on Dec 31.

It sounds like you don't have SEP or SIMPLE IRAs, just traditional.

If you closed one in 2017, that one's contribution to the total is zero.

Tell TurboTax your basis of $6040. and what you took out during 2017 (that's your 1099-R) . TurboTax will do the calculations on Form 8606 for you.

W

Winnie51Author

I guess I don't understand. Why am I being what appears to be penalized for taking a distribution when I am over 59 and a half years old and I'm paying taxes on that distribution and TurboTax is only calculating a small portion of the basis. Now I am to forfeit an additional $900+ in what I would have received as a tax refund. I am only liquidating the mixed up IRA over two years. The other IRA's are being left as is. Does this mean every year from now on I will be penalized when I report the market value of my IRA's? What is the benefit of an IRA when they have made no or little interest and now I am double taxed when I liquidate a piddly IRA? This is frustrating. We really need the tax refund.