I recently realized that I need to file IRS form 8606 for a previous tax year(2011), to track my basis for non-deductible contributions to a traditional IRA.
I hold a bond fund in the traditional IRA account, which pays monthly interest. In the year for which I am filing form 8606, I made monthly investments in the bond fund. I also set the account to re-invest any interest that the bond fund produced in the same fund. In the transaction history of the fund, the custodian has marked these 2 methods as "Buys" and "Distributions". But looking only from a account point of view, both have bought additional shares in the fund.
- For the line in the form, where it asks for total contributions, I am confused by what means. Should I only include the "Buys" that I did with my post-tax income or should I also include the "Distributions" which also bought the shares of the bond fund?
- The "Buy" transactions were made for the fund in 2011 tax year. After that year, there were no "Buy" transactions but only "Distributions". In that case, do I also need to file 8606 for 2012 tax year?