Is this 8606 calc correct?

[joanmcq]

Taxpayer has made $18000 in nondeductible IRA contributions. He’s 72 but still working and $6000 was made for 2021 (but I’m not sure if it was made in 2022 or not. Sending an email). Anyways, if box 4 is zero, it uses up all of the basis in the IRA this year, since the RMD was over $18000. If I put $6000 in box 4, none of the RMD is non taxable.  Shouldn’t the non taxable portion be a fraction of the amount?

[jklcpa]

1 hour ago, joanmcq said:

Shouldn’t the non taxable portion be a fraction of the amount?

Yes. 

Have you completed the rest of the form with the FMVs, and are the distributions flowing to the 8606 also?

[joanmcq]

I have. And I get the result above.

the question may be moot; it turns out my client did not make contributions the last 3 years. 

[TexTaxToo]

I'm not sure what contributions during the last 3 years has to do with it.  (They could affect taxability of QCDs.)

When you print Form 8606, do you see the basis ($18,000 assuming no previous withdrawals) on line 2, the FMV as of 12/31 on line 6?  Then there should be a percentage on line 10, and the nontaxable portion on line 13.

[jklcpa]

Agree with Tex above.  If the taxpayer has basis and has received a distribution, then a percentage of that is a return of basis.

[joanmcq]

Client was mistaken, the contributions he thought he made for the last 3 years (all of the nontaxable contributions) and were marked in his organizer, he did not actually make.  They were contributions to his taxable account.  

So do I just delete the 8606? Mark the basis as zero and file it?