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By Ian Berger, JD
IRA Analyst
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Dear Mr. Slott,

I made $40,000 additional non-deductible (after taxes) contributions to my IRA many years ago. I have filed IRS Form 8606 every year informing the IRS of the contributions. I would like to withdraw the $40,000 this year so that when I have to take my RMDs next year, the reporting to the IRS will be simpler.

Since these contributions were on an after-tax basis, how do I calculate the amount I owe to the IRS for any gains? And how do I report to the IRS that I am withdrawing the $40,000 non-deductible (after tax) contributions so I don’t have to pay taxes on this withdrawal?

Thank you,



Assuming you also have pre-tax (or SEP or SIMPLE) IRA funds, you can’t just cherry pick your after-tax funds for withdrawal. Instead, the pro-rata rule will apply, and a portion of your withdrawal will be taxable. The 8606 for the year of withdrawal will apply the pro-rata rule to calculate your taxable portion. You will report on your tax return the total amount of your withdrawal (from the 1099-R provided by the IRA custodian) and the taxable portion (from the 8606).


If a minor (under 18) inherits a Roth IRA, when does the 10-year clock start for the Roth to be fully depleted?  At 18 or at the date they inherit?




A minor child of a Roth IRA owner could choose to be subject to the 10-year RMD (required minimum distribution) payment rule in the year she turns age 21. In that case, the remaining inherited IRA must be depleted by the last day of the 10th year following the year she turns 21. Until age 21, the child would take annual RMDs over her single life expectancy. And since RMDs were started, it appears the IRS would require those annual RMDs to continue within the 10-year period. Alternatively, the minor child could choose to have the 10-year rule period start immediately upon the parent’s death and not have annual RMDs in years 1 – 9.