Question

In selling an IRA, do I enter all years of distributions into Turbo Tax to calculate the cost basis or is the Taxable Amount (Box2a) the true taxable amount?

Forum|Forum|5 years ago
March 14, 2021
1 reply
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Bought the IRA back in 1986. Sold the entire IRA last year. Lots of dividend income, and capital gains reinvested back into the IRA.

TurboTax Premier Online

D

dmertz

Employee

1986 pre-dates the effective date of the portion of the tax code that permits nondeductible contributions to a traditional IRA, so if your 1986 contribution was the only contribution to traditional IRAs, your basis in nondeductible traditional IRA contributions is zero and the entire amount of the distribution is taxable.

Investments in a traditional IRA do not have a capital cost basis. All deferred income in a traditional IRA is treated as ordinary income.