QUESTION:

Traditional IRA taxes

If you made all your IRA contributions with after tax dollars for both yourself and spouse can these dollars be deducted from figuring tax when you begin the req'd minimum distribution(RMD)? I have contributed the max for both myself and spouse since IRA inception each year. I took the credit/deduction for IRA contributions in the first year or two when everyone could regardless of income. How many years was this allowed? After that,I didn't qualify. If you can take cost out when you start RMD, how do you figure it out to show the IRS?
asked by callahandlc, 5/26/2008
Categories: IRAs
ANSWERS:
Answered by: Editorial, 05/30/08
Overall Rating: Be the first to rate it.

Well... your best course of action would be to consult with a tax accountant.

I think that you only have to pay taxes on the capital gains part of your distribution -- since you already paid tax on the principal part.

So you put $100 in - then earned $200 in cap gains on top (which you haven't paid taxes on inside the IRA) - then when you take $300 out - you pay tax on $200 of it, but not the first $100

You should definitely double check that.

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