IRA WITH AFTER TAX MONEY
MY IRA ORIGINALLY WAS AN INVESTMENT SAVINGS PLAN WITH THE OPTION OF PRE TAX AND AFTER TAX MONEY CONTRIBUTED TO IT, AS WELL AS THE COMPANY MATCH. MANAGERS CHANGED OVER THE YEARS AND EVENTUALLY IT WAS CALLED AN IRA. NOW THE SUM MONEY IN IT HAS GROWN AND I HAVE TO TAKE REQUIRED YEARLY DISTRIBUTIONS. HOWEVER 11+% OF THE MONEY IN IT IS DUE TO AFTER TAX DOLLARS CONTRIBUTED TO IT OVER 20 YEARS AGO. MY THINKING WAS THAT THE 11% SHOULD BE REMOVABLE AND TAXED AS LONG TERM CAPITAL GAINS. BUT I HAVE FOUND NOBODY WHO KNOWS HOW TO DO IT, IF IN FACT IT CAN BE DONE.
ANY BODY KNOW HOW TO DO THIS.
Permalink Submitted by Alan - IRA critic on Tue, 2017-10-10 17:12
It is not clear how this became an IRA. Do you have old year end statements which shed more light on the history of this account? Was there ever a rollover done? If this is actually an IRA and you can document that it contains after tax contributions you could file Form 8606 for your first distribution year and show the dollar basis on lines 2 and 3 of the 8606. Note that a non IRA plan that contained after tax contribution amounts was not allowed to transfer those amounts to an IRA before 2002.
Permalink Submitted by DOUGLAS Doremus on Thu, 2017-10-12 23:34
HELLO ALAN. THANX FOR YOUR RESPONSE. I AM NOT SURE HOW IT ALL CAME ABOUT. I DO KNOW THAT I HAVE ALL (OR ALMOST ALL) OF THE NECESSARY DOCUMENTATION. I WILL HAVE TO LOOK INTO THE FORM 8606 BUT I SUSPECT IT WILL BE MORE COMPLEX THAN I CAN HANDLE. ALL OF MY MINIMUM DISTRIBUTIONS HAVE BEEN PARTIALLY THE RESULT OF AFTER TAX MONEY IN THE IRA. ANY FURTHER COMMENTS WOULD BE APPRECIATED. THANX, GAILDOR