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Author: hlcamp Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121219  
Subject: Form 8606 I and II Date: 2/4/1999 1:11 AM
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I went back and read a few responses to my original questions and some others on filling out the 8606. And now, I would just like to make a last verification of this and maybe avoid buying a tax software package.

The way I chose to complete Form 8606 mirrored the Rosa Green example in Pub 590, page 28-29. Starting in Part II, I enter the full conversion amount to Roth from traditional IRA of 9805 in line 14a. 14c was same. In the example, line 15 is left blank (I guess it assumes all 98 contributions non-deduct?) and 16 comes to 7979 (difference between this number and 9805 is contributions made to traditional IRA in 98). 17 is one quarter.

Now, I can find Modified AGI. Swell. Again, I use a worksheet in 590. This time it is the Worksheet for Reduced IRA Deduction, page 11. I work through this and find line 7(IRA deduction) is 1250 and line 8(non-deduct contributions) is 576. But I think this only offers misleading numbers...

And now the moment of truth.? The way I currently have 8606 line 15 set up, I am assuming all contributions for 98 are Non-Deductible right? Thus, line 1 would equal the total contributions in 98 of 1826, not the amount suggested in the prior paragraph. 3 and 5 would be the same. 10 would also be 1826 and 13 would be 0(see Rosa Green example).

Then in this case, I would have NO IRA deduction entry on 1040A line 15.? 10a would be 9805 and 10b 1995.?

Now, one last question. I seem to recall someone said I could do this two ways. Either assume all is non-deductible as above or deduct all or some (some in my case). Is that allowed? If so, I don't know how to calculate the amount to enter on line 15 (total non-deduct contributions in 98 + 0 for prior years) without first completing Part II to find modified AGI... I cannot see how this scenario is possible.

I hope this method above makes sense. It does to me at least. I declare all contributions(1826) on 98 non-deduct and then remove that amount from the total rollover amount(9805) to come up with the amount subject to tax/4(7979/4).
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