1040-US: Data entry for client who received a distribution from a traditional IRA and also made a nondeductible contribution in the prior-year to a traditional IRA in the current year

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Question

I have a client who received a distribution from a traditional IRA and also made a nondeductible 2018 contribution to a traditional IRA in 2019. How do I enter this in order to have Form 8606 calculate correctly?

Answer

In Screen 1099R, enter the total distribution amount in the Gross distribution and Taxable amount fields. Enter the applicable distribution code in the Distributions code field, and enter X in the IRA/SEP/SIMPLE field.

In Screen IRA, enter amounts in the following fields: Traditional IRA contribution, Designated nondeductible contributions, Traditional IRA basis, and Designated nondeductible contribution made in 2019 for 2018.

Related topic: Individual retirement account FAQs (1040)