Basis recovery from IRA
Does the value of Rollover IRA’s have to be included on line 6 of form 8606 when calculating the basis recovery for traditional IRA converted to Roth IRA? Client has substantial Rollover IRAs’s that would dilute basis recovered. Instructions specifically list Traditional, SEP, and Simple IRAs but doe not list rollover IRAs.
Permalink Submitted by Jose Morales on Fri, 2015-04-03 15:29
Yes they would be included. The term “Rollover IRA” was used in the past to identify an account which received a rollover of funds from a qualified employer sponsored retirement plan and to maintain the ability to roll the funds back into a qualified employer sponsored retirement plan in the future. There really is no such thing as a “Rollover IRA” as something that is separate and distinct from a Traditional IRA.