Question

Form 8606 is not required when a taxpayer

A: Makes a deductible traditional IRA contribution.

B: Takes a qualified Roth IRA distribution.

C: Converts a SEP IRA to a Roth IRA.

D: Is over age 59 1/2 and converts a traditional IRA to a Roth IRA.

Answer 1

Answer

Form 8606 is not required when a taxpayer is "makes a deductable traditional IRA contribution"

"Takes a qualified Roth IRA distribution"

And " if taxpayer attains the safe 59 1/2 and converts a traditional IRA to a Roth IRA"

Except option C converts SEP IRA to a Roth IRA.

Explanatory note:

Under the traditional IRA

If the taxpayer does not claim a deduction for a regular contribution, the amount contributed is after tax and is considered as base then IRA owner must file IRS form 8606 otherwise no need to file in this case. Therefore answer A should be correct.

optionB &D relating to Roth IRA distributions.

Under part 3 of form 8606 if a qualified distribution made from Roth IRA there is no need to complete form 8606. The same provision is inter linked with the option D

Here qualified distribution means after a Roth IRA owner attains age 59 1/2 years the conversion of traditional IRA to a Roth IRA happen then no need to file Form 8606.

And

Option C about Roth IRA conversions:

It talks about if any distributions made from a traditional SEP or simple IRA which is deposited into a Roth IRA then as per part 2 if form 8606 is mandatory to file Form 8606. That is the reason it is not the right answer.

Thank you

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