DISCLOSURE

CONNECT WITH US:

  • facebook-square
  • linkedin-square

Phone: 973-455-1894 | 51 Dumont Place, Morristown, NJ 07960 | Get directions!

Kiely Capital Management offers financial planning and investment advice. Serving Central and Northern New Jersey, Yvonne and Bernard (Bernie) Kiely provide over 25 years of experience offering discretionary asset management, retirement planning and income tax preparation. KCM is registered with the State of New Jersey as a Registered Investment Advisor.

 

“The only thing we sell is good advice.”

©2018 Kiely Capital Management Inc. All rights reserved.

Website Design by VIP Solutions.biz

How do I value these IRAs for tax purposes?

 

Q. I have three separate retirement accounts held at a single brokerage firm. The first is a traditional IRA on which I paid New Jersey tax on my contributions when I made them. I have a rollover IRA which was originally an out-of-state 401(k). I did not pay New Jersey tax on those contributions. Then there's a second rollover IRA that was originally a 457(b) account. Those contributions were taxed when I made them. In 2018 I converted $10,000 from the former 401(k) to a Roth. How do I value the year-end value of the accounts for my tax return?

-- Taxpayer

 

A. We're glad to hear you've saved over the years.

 

There are a few items to note.

 

When you take a distribution from an IRA, you must include all IRAs - except Roth IRAs - in the cost basis calculation, said Bernie Kiely, a certified financial planner and certified public accountant with Kiely Capital Management in Morristown..

 

In your first traditional IRA, you received no New Jersey tax benefits when you contributed to the account, he said.

 

"Accordingly, all contribution to this account have cost basis for New Jersey tax purposes," he said.

 

For the account that was a rollover from an out-of-state 401(k) account, you say you did not receive a New Jersey tax deduction for the contributions.

 

"If you did not receive a tax deduction from any state, then you have basis in this account as well," Kiely said.

 

The third IRA account is a rollover from a 457(b) account from which you received no New Jersey tax benefit when you made contributions to it, so this account also has cost basis in it for New Jersey purposes, Kiely said.

 

"So when you do the cost basis calculations on Worksheet C "IRA Withdrawals," you must include all three IRA accounts in line #1," he said.

 

Email your questions to Ask@NJMoneyHelp.com.

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

Tags:

Share on Facebook
Share on Twitter
Please reload

Recent Posts
Please reload

Archive
Please reload

Search By Tags
Follow Us
  • Facebook Basic Square
  • Twitter Basic Square
  • Google+ Basic Square