What this line means
The taxable portion of your IRA distributions. For traditional IRAs funded entirely with deductible contributions, the full distribution is taxable. If you made nondeductible contributions, you have basis — and only the portion exceeding your basis is taxable. For qualified Roth distributions, this line is zero.
Does this apply to you?
- You took a distribution from a traditional IRA funded with pre-tax contributions
- You withdrew from a traditional IRA that contains both deductible and nondeductible contributions
- You converted a traditional IRA to a Roth IRA (the converted amount is taxable)
- You took a non-qualified distribution from a Roth IRA (earnings portion is taxable)
- You received an RMD from a traditional IRA
Easy to overlook
Nondeductible IRA contributions reduce the taxable amount If you made after-tax contributions to a traditional IRA in any year, you have basis that is not taxed again on withdrawal. But the IRS applies the pro-rata rule — you cannot cherry-pick which dollars come out. You must calculate the taxable portion using Form 8606 based on the ratio of basis to total IRA value across all your traditional IRAs. 1 IRS Publication 590-B — Distributions from IRAs
The pro-rata rule aggregates all traditional IRAs You cannot take a tax-free distribution from the IRA with nondeductible contributions while leaving the deductible-contribution IRA untouched. The IRS treats all your traditional IRAs as one pool for calculating the taxable percentage. Filers with multiple IRAs frequently miscalculate by applying basis only to the distributing account. 2 General filing pattern — nondeductible IRA basis tracking
Watch out for this
Reporting the full distribution as taxable when you have nondeductible IRA basis. Without Form 8606, the IRS assumes the entire distribution is taxable. If you ever made nondeductible traditional IRA contributions, file Form 8606 with your return to claim your basis and reduce the taxable amount on line 4b.
Footnotes
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IRS Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs), Taxation of Distributions. https://www.irs.gov/pub/irs-pdf/p590b.pdf ↩
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IRS Form 8606 Instructions, Nondeductible IRAs. https://www.irs.gov/instructions/i8606 ↩