Tax Form 8606, Nondeductible IRAs – Calculating the Value of IRAs
On Form 8606, Nondeductible IRAs, Line 6 asks to list the value of all of your IRAs. My assumption is that this means both traditional IRA brokerage and qualified IRA annuities. Correct?
The value reported changes over time, for example, as the stock brokerage account grows or loses money. Likewise, when a qualified annuity is annuitized, i.e., converted into an income stream, its value will decrease as the money is paid out.
My question: is an IRA annuitized annuity still considered to have value and that should be included in the total value of all IRA accounts on Form 8606, Line 6? Technically, the annuity, which has now been converted into an income stream, exists as a new contract that the insurance issuer now owns. For example, I have a qualified annuity that was annuitized last year. I also received a statement from the insurance company that reported its value at the end of last year to the IRS. I suspect I will need to use this value on Form 8606, Line 6.
Comments welcome.
Permalink Submitted by Alan - IRA critic on Tue, 2023-02-14 20:52
Duplicate – see other thread on this. The 2022 year end value reported may be useable on line 6 depending on how the company calculated it since the annuity IRA had already been paid out to the insurance company in exchange for the income stream. If the figure reported makes sense you could use it to complete line 6.