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IRA distributions when records are missing

Cost basis matters when you're getting ready to take IRA distributions. (

Q. When I was a public employee and in the 1980s, my wife and I contributed to a non-deductible traditional IRA. I did not keep good records of these contributions and did not file Form 8606. The company that handled our IRA accounts went out of business and the accounts were transferred to a new company. Later, I stopped making contributions to the IRAs and changed to contributing to a 457B plan through work. Is there a way I can find out how much we contributed to these IRAs and if not, what do we use as our basis? We are both 70 1/2 and have to start taking distributions this year.

-- Investor

A. Ah, the old mess of not having records about old investments.

First, when you make non-deductible contributions to an IRA, you have what the IRS calls "basis," said Bernie Kiely, a certified financial planner and certified public accountant with Kiely Capital Management in Morristown.

"Basis is your cost for something. When you have basis in your IRA, you do not have to pay federal or state income tax on your basis," Kiely said.

But what happens if you have no record of your basis?

You have two options.

"Your first option is to forget your basis and pay federal and state tax on all of your IRA distributions," Kiely said. "The second option is to estimate your accumulated after tax contributions to your IRA."

For estimates, you need two dates, he said: when you first started contributing to your IRA, and also when you started to contribute to your 457B plan.

Then you need to consider how much you contributed to the IRA accounts every year, Kiely said.

The historical IRA contribution limits are:

1974 to 1981: $1,500 1982 to 2001: $2,000 2002 to 2004: $3,000 2005 to 2007: $4.000 2008 to 2012: $5,000 2013 to 2018: $5,500

"I believe it is worth the effort to estimate your IRA basis," Kiely said.

Just be sure to document how you arrived at your basis if the IRS ever comes calling.

Karin Price Mueller writes the Bamboozled column for NJ Advance Media and is the founder of Follow NJMoneyHelp on Twitter @NJMoneyHelp. Find NJMoneyHelp on Facebook. Sign up for's weekly e-newsletter.


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