Permalink Submitted by Alan Spross on Mon, 2010-09-27 22:44
The answer posted is correct, except change it to the correct %. Since that % is so small, I don’t know if it is worth the trouble to deal with a Form 8606 for the rest of his life whenever he takes a distribution.
Perhaps he should just deposit the 3,500 into his taxable account. The distribution is tax free and would not be added to line 15b.
If the small after tax amount was from pre 1987 after tax contributions, he could also roll them to a Roth IRA. But if not pre 87, then the pro rate rules might apply once the IRS clarifies their position on this.
Permalink Submitted by Alan Spross on Mon, 2010-09-27 22:44
The answer posted is correct, except change it to the correct %. Since that % is so small, I don’t know if it is worth the trouble to deal with a Form 8606 for the rest of his life whenever he takes a distribution.
Perhaps he should just deposit the 3,500 into his taxable account. The distribution is tax free and would not be added to line 15b.
If the small after tax amount was from pre 1987 after tax contributions, he could also roll them to a Roth IRA. But if not pre 87, then the pro rate rules might apply once the IRS clarifies their position on this.