Form 8606 Errors
I converted a TIRA to a Roth account in March to take advantage of the suspended AGI limit. The approximate value of the converted account was $58,000. Unfortunately, the last Form 8606 in my records from my 2007 tax return showed a $4000 basis. A clear mistake as that was the (non-deductible) value contributed to the TIRA for that tax year and I failed to include the built up basis from previous years.
I have never had a deductible contribution and reconstruction from past mutual fund statements show I have made $16,000 in contributions since 1987. Can I submit a revised form 8606? Should it be an 8606 for 2007 or 2009? My ultimate goal is to have a more accurate (and higher) basis on record before paying the tax on this conversion next April
Permalink Submitted by Alan Spross on Tue, 2010-05-25 02:44
This will take some research, but you need to determine the first year that you either failed to file an 8606 or filed an incorrect 8606, and then you need to file or amend that one and file later year 8606 forms that update the correct cumulative basis figure for each year. Sounds like there were a few years that you did not contribute and you can skip those years.
The IRS has not been levying the $50 fine for incorrect 8606 forms and will accept your revisions. However, if you overstate your basis, all bets are off. Send in all the old 8606 forms together with a note of explanation to your current IRS filing center. When you file the 8606 for your 2010 conversion, assume the IRS has accepted your forms. The 2010 8606 will determine the taxable amount of your conversion even though you will probably report half the income in 2011 and 2012.
Permalink Submitted by Ken Voorhees on Tue, 2010-05-25 03:57
Thank-you for the help!
2007 is the last year I filed an 8606 for a TIRA contribution and unfortunately, that last filing was the one in error. I will amend that 8606 and re-submit it based on the contribution records from my mutual fund statements.