Cream in the Coffee Formula – IRA distributions/conversions
Wanted to double check how the taxable fraction is calculated. Is the percentage taxable based on the total of all IRA accounts pretax contributions and rollovers divided by the grand total of the contributions.
Jan Sleeter
Permalink Submitted by Alan Spross on Wed, 2010-04-21 20:59
1) Determine the total current year end value of all traditional, SEP or SIMPLE IRA accounts and add back distributions or conversions to that total
2) Determine your total basis from all sources of non deductible or after tax contributions
3) Subtract 2) from 1)
4) Divide 3) by 1) and round to 3 decimal places for the taxable %