Should I file Form 8606 for converting money from a traditional IRA to a Roth IRA?

by James D. Adelsperger, CPA | Jul 06, 2017

In 2009 and again in 2012, I converted some traditional IRA money to a Roth IRA. I included the amount in my tax filing and paid the tax. I did not file a Form 8606 for each of those years. Do I need to do it now? I'm just ready to start taking required minimum distributions (RMDs), and I've read that the Roth is part of my basis. I have basis with my traditional IRA. What if I just cashed out the Roth now? Would the IRS look for the 8606s for the Roth? What should I do?

When you did the conversion from traditional IRA to Roth IRA, part of your basis in the traditional IRA was included in the amount you converted to the Roth IRA. Completing Form 8606 for each of the years in question will assist you in making this calculation. Once you have completed the necessary 8606 forms, mail them to the IRS. Normally there is a $50 penalty for each late filed form, but the IRS may waive the penalty for “reasonable cause.” That should help clear up your situation.

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Answered by: James D. Adelsperger, CPA, is senior family wealth guardian with ParenteBeard Wealth Management in Lancaster, Pa.
The responses are based on the limited information provided by the questioner and apply the laws and regulations at the time of posting. Other options could arise as rules and regulations may change over time, including but not limited to the passage of the Tax Cuts and Jobs Act of 2017. They are intended to provide general information, not specific accounting or tax advice; they are not intended or written to be used and cannot be used for the purpose of avoiding or evading taxes or penalties under the IRS code or regulations. Views expressed do not imply an opinion of the PICPA, its officers, directors, employees, or members.
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