Permalink Submitted by Alan Spross on Tue, 2010-11-09 22:40
You can’t separate it. It must come out pro rated with the pre tax amount. That means that 98.2% of each distribution is taxable. This is calculated on Form 8606 when you have non deductible contributions in your IRA.
There is only one way around this. If you are working and your employer plan will accept IRA rollovers, you can roll the pre tax amount into the plan, leaving behind the 18,000. Then you can either distribute the 18,000 tax free or convert it tax free to a Roth IRA. Probably not worth the effort when your basis is only 1.8%.
Permalink Submitted by Alan Spross on Tue, 2010-11-09 22:40
You can’t separate it. It must come out pro rated with the pre tax amount. That means that 98.2% of each distribution is taxable. This is calculated on Form 8606 when you have non deductible contributions in your IRA.
There is only one way around this. If you are working and your employer plan will accept IRA rollovers, you can roll the pre tax amount into the plan, leaving behind the 18,000. Then you can either distribute the 18,000 tax free or convert it tax free to a Roth IRA. Probably not worth the effort when your basis is only 1.8%.
Permalink Submitted by John Clark on Wed, 2010-11-10 15:39
I agree with Alan!
But are you asking how to calculate an after tax withdrawl amount?
If so the equation on 100% taxable IRA money is:
$18,000/(1-tax rate%)=gross withdrawl
Regards,
JC