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Retirement Planning/RMD and Cost-Basis due to nondeductible ira contribs over the years.


I have made years of non-deductible ira contributions.
Let's say the total is 20,000.
When I am 70 1/2 and have to start taking RMD.
Let's suppose the balance on 12/31 of the year before I turn 70.5 is $300,000. Using current RMD calculators it says my RMD is 10,948.91.
Can take the 100% of cost basis of 20,000 off entirly on this first year and pay no taxes, or do I have to calculate the percentage of my 300,000 that comes from NON DEDUCTIBLE IRA instead.
For example, suppose of the 300K, I had 120K in NON DEDUCTIBLE ir account. 120K/300K = 40% so I can only take 40% of my cost basis
which is 40% of 20K = 8K.

So of my 10948.91 RMD in that year, can I only pay taxs on that amount minus 8K in that first year.

Or do you have to spread the cost basis over your life expectancy.

Hi Ana,

Since non-deductible contributions to an IRA have already been taxed, you will only pay tax on the gain in your non-deductible account. So if you contributed, say, $80k and the account had grown to $100k, 20% of your account would be subject to RMD because 20% of the account value is gain over your cost basis. Now if you also had another IRA that was tax deductible, the entire value of that IRA would be subject to RMD because you have not paid tax on either the cost basis or the gain. All IRA's are taxed aggregately for RMD purposes. So if you had a deductible IRA of $100k and and a non-deductible IRA of $100k of which $20k was gain, than 60% of the total of both IRA's would be subject to RMD ($100k of the deductible IRA + $20k of gain from the non-deductible or $120k out of $200k. Here is a link to some more info on RMD's from the IRS website:,-Employee/Retirement-Topics

I hope this answers your question. Feel free to contact me again if this does not explain it. Best of luck!


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David M Iannopollo


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