Schedule N 5471 Return of Officers, Directors, and 10% or More Sharehold

U.S. Individual Income Tax Return

Schedule N 5471

U.S. Individual Income Tax Return

OMB: 1545-0074

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I.R.S. SPECIFICATIONS
TO BE REMOVED BEFORE PRINTING
INSTRUCTIONS TO PRINTERS
FORM 8606, PAGE 1 of 2
MARGINS: TOP 13mm (1⁄ 2 "), CENTER SIDES. PRINTS: HEAD to HEAD
PAPER: WHITE, WRITING, SUB. 20
INK: BLACK
FLAT SIZE: 216mm (81⁄ 2 ") x 279mm (11")
PERFORATE: (NONE)
DO NOT PRINT — DO NOT PRINT — DO NOT PRINT — DO NOT PRINT

8606

Action

Revised proofs
requested

OMB No. 1545-0074

2006

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See separate instructions.

Attachment
Sequence No.

Attach to Form 1040, Form 1040A, or Form 1040NR.

Name. If married, file a separate form for each spouse required to file Form 8606. See page 5 of the instructions.

Part I

Signature

O.K. to print

Nondeductible IRAs

Department of the Treasury
Internal Revenue Service (99)

Fill in Your Address Only
if You Are Filing This
Form by Itself and Not
With Your Tax Return

Date

Your social security number

Home address (number and street, or P.O. box if mail is not delivered to your home)

Apt. no.

City, town or post office, state, and ZIP code

Nondeductible Contributions to Traditional IRAs and Distributions From Traditional, SEP, and SIMPLE IRAs
Complete this part only if one or more of the following apply.
● You made nondeductible contributions to a traditional IRA for 2006.
● You took distributions from a traditional, SEP, or SIMPLE IRA in 2006 and you made nondeductible contributions to
a traditional IRA in 2006 or an earlier year. For this purpose, a distribution does not include a rollover (other than a
repayment of a qualified hurricane distribution), qualified charitable distribution, conversion, recharacterization, or
return of certain contributions.
● You converted part, but not all, of your traditional, SEP, and SIMPLE IRAs to Roth IRAs in 2006 (excluding any portion
you recharacterized) and you made nondeductible contributions to a traditional IRA in 2006 or an earlier year.

1
2
3

Enter your nondeductible contributions to traditional IRAs for 2006, including those made for
2006 from January 1, 2007, through April 16, 2007 (see page 5 of the instructions)
Enter your total basis in traditional IRAs (see page 5 of the instructions)
Add lines 1 and 2
In 2006, did you take a
distribution from traditional,
SEP, or SIMPLE IRAs, or
make a Roth IRA conversion?

4
5
6

9
10
11

Yes

1
2
3

Enter the amount from line 3 on
line 14. Do not complete the rest
of Part I.
Go to line 4.

Enter those contributions included on line 1 that were made from January 1, 2007, through
April 16, 2007
Subtract line 4 from line 3
Enter the value of all your traditional, SEP, and SIMPLE IRAs as of
December 31, 2006, plus any outstanding rollovers. Subtract any
repayments of qualified hurricane distributions. If the result is zero or
less, enter -0- (see page 5 of the instructions)

Enter your distributions from traditional, SEP, and SIMPLE IRAs in
2006. Do not include rollovers (other than repayments of qualified
hurricane distributions), qualified charitable distributions, conversions
to a Roth IRA, certain returned contributions, or recharacterizations
of traditional IRA contributions (see page 6 of the instructions)

Enter the net amount you converted from traditional, SEP, and SIMPLE
IRAs to Roth IRAs in 2006. Do not include amounts converted that
you later recharacterized (see page 6 of the instructions). Also enter
this amount on line 16
9
Add lines 6, 7, and 8
Divide line 5 by line 9. Enter the result as a decimal rounded to at
least 3 places. If the result is 1.000 or more, enter “1.000”
Multiply line 8 by line 10. This is the nontaxable portion of the amount
you converted to Roth IRAs. Also enter this amount on line 17

4
5

Multiply line 7 by line 10. This is the nontaxable portion of your
12
distributions that you did not convert to a Roth IRA
13 Add lines 11 and 12. This is the nontaxable portion of all your distributions
14 Subtract line 13 from line 3. This is your total basis in traditional IRAs for 2006 and earlier years
15a Subtract line 12 from line 7
b Amount on line 15a attributable to qualified hurricane distributions (see page 6 of the instructions).
Also enter this amount on Form 8915, line 22
c Taxable amount. Subtract line 15b from line 15a. If more than zero, also include this amount on
Form 1040, line 15b; Form 1040A, line 11b; or Form 1040NR, line 16b
Note: You may be subject to an additional 10% tax on the amount on line 15c if you were under
age 591⁄ 2 at the time of the distribution (see page 6 of the instructions).
For Privacy Act and Paperwork Reduction Act Notice, see page 8 of the instructions.

13
14
15a
15b
15c

Cat. No. 63966F

Form

8606

(2006)

6
I.R.S. SPECIFICATIONS
TO BE REMOVED BEFORE PRINTING
INSTRUCTIONS TO PRINTERS
FORM 8606, PAGE 2 of 2
MARGINS: TOP 13mm (1⁄ 2 "), CENTER SIDES. PRINTS: HEAD to HEAD
PAPER: WHITE, WRITING, SUB. 20
INK: BLACK
FLAT SIZE: 216mm (81⁄ 2 ") 3 279mm (11")
PERFORATE: (NONE)
DO NOT PRINT — DO NOT PRINT — DO NOT PRINT — DO NOT PRINT

Form 8606 (2006)

Part II

Page

2006 Conversions From Traditional, SEP, or SIMPLE IRAs to Roth IRAs

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Complete this part if you converted part or all of your traditional, SEP, and SIMPLE IRAs to a Roth IRA in 2006 (excluding
any portion you recharacterized).
Caution: If your modified adjusted gross income is over $100,000 or you are married filing separately and you lived with
your spouse at any time in 2006, you cannot convert any amount from traditional, SEP, or SIMPLE IRAs to Roth IRAs
for 2006. If you erroneously made a conversion, you must recharacterize (correct) it (see page 6 of the instructions).
16

If you completed Part I, enter the amount from line 8. Otherwise, enter the net amount you
converted from traditional, SEP, and SIMPLE IRAs to Roth IRAs in 2006. Do not include amounts
you later recharacterized back to traditional, SEP, or SIMPLE IRAs in 2006 or 2007 (see page 7
of the instructions)

If you completed Part I, enter the amount from line 11. Otherwise, enter your basis in the amount
on line 16 (see page 7 of the instructions)

Taxable amount. Subtract line 17 from line 16. Also include this amount on Form 1040,
line 15b; Form 1040A, line 11b; or Form 1040NR, line 16b

Part III

Distributions From Roth IRAs

Complete this part only if you took a distribution from a Roth IRA in 2006. For this purpose, a distribution does not
include a rollover (other than a repayment of a qualified hurricane distribution), qualified charitable distribution,
recharacterization, or return of certain contributions (see page 7 of the instructions).
19

Enter your total nonqualified distributions from Roth IRAs in 2006 including any qualified first-time
homebuyer distributions (see page 7 of the instructions)

Qualified first-time homebuyer expenses (see page 7 of the instructions). Do not enter more
than $10,000

Subtract line 20 from line 19. If zero or less, enter -0- and skip lines 22 through 25

Enter your basis in Roth IRA contributions (see page 7 of the instructions)

Subtract line 22 from line 21. If zero or less, enter -0- and skip lines 24 and 25. If more than zero,
you may be subject to an additional tax (see page 7 of the instructions)

Enter your basis in Roth IRA conversions (see page 7 of the instructions)

25a

25a Subtract line 24 from line 23. If zero or less, enter -0- and skip lines 25b and 25c
b Amount on line 25a attributable to qualified hurricane distributions (see page 8 of the instructions).
Also enter this amount on Form 8915, line 23
c Taxable amount. Subtract line 25b from line 25a. If more than zero, also include this amount on
Form 1040, line 15b; Form 1040A, line 11b; or Form 1040NR, line 16b

Preparer’s
signature

25c

Under penalties of perjury, I declare that I have examined this form, including accompanying attachments, and to the best of my
knowledge and belief, it is true, correct, and complete.

Sign Here Only if You
Are Filing This Form
by Itself and Not With
Your Tax Return

Paid
Preparer’s
Use Only

25b

Your signature

Firm’s name (or yours
if self-employed),
address, and ZIP code

Date

Date
Preparer’s SSN or PTIN

Check if selfemployed
EIN
Phone no.

(

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Form

8606

(2006)

PAGER/SGML

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Page 1 of 9

Instructions for Form 8606

15:55 - 13-JAN-2006

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2005

Department of the Treasury
Internal Revenue Service

Instructions for Form 8606
Nondeductible IRAs

General Instructions
Section references are to the Internal
Revenue Code unless otherwise
noted.

What’s New
IRA contribution limit increased.
You, and your spouse if filing jointly,
can now contribute up to $4,000
($4,500 if age 50 or older at the end
of 2005) to your IRA. See Overall
Contribution Limit for Traditional and
Roth IRAs that begins on page 2.
Hurricane tax relief. Special rules
may apply if you received a
distribution from your IRA and your
main home was located in the
Hurricane Katrina, Rita, or Wilma
disaster area, and you sustained an
economic loss due to Hurricane
Katrina, Rita, or Wilma.
Special rules may also apply if you
received a distribution to purchase or
construct a main home in the
Hurricane Katrina, Rita, or Wilma
disaster area, but that home was not
purchased or constructed because of
Hurricane Katrina, Rita, or Wilma.
See Form 8915, Qualified
Hurricane Retirement Plan
Distributions and Repayments, for
more details.

Purpose of Form
Use Form 8606 to report:
• Nondeductible contributions you
made to traditional IRAs,
• Distributions from traditional, SEP,
or SIMPLE IRAs, if you have ever
made nondeductible contributions to
traditional IRAs,
• Distributions from Roth IRAs, and
• Conversions from traditional, SEP,
or SIMPLE IRAs to Roth IRAs.
Additional information. See Pub.
590, Individual Retirement
Arrangements (IRAs), for more
details.
If you received distributions
TIP from a traditional, SEP, or
SIMPLE IRA in 2005 and you
have never made nondeductible
contributions to traditional IRAs, do
not report the distributions on Form

8606. Instead, see the instructions for
Form 1040, lines 15a and 15b; Form
1040A, lines 11a and 11b; or Form
1040NR, lines 16a and 16b. Also, to
find out if any of your contributions to
traditional IRAs are deductible, see
the instructions for Form 1040, line
32; Form 1040A, line 17; or Form
1040NR, line 31.

Who Must File
File Form 8606 if any of the following
apply.
• You made nondeductible
contributions to a traditional IRA for
2005.
• You received distributions from a
traditional, SEP, or SIMPLE IRA in
2005 and your basis in traditional
IRAs is more than zero. For this
purpose, a distribution does not
include a rollover (other than a
repayment of a qualified hurricane
distribution), conversion,
recharacterization, or return of certain
contributions.
• You converted an amount from a
traditional, SEP, or SIMPLE IRA to a
Roth IRA in 2005 (unless you
recharacterized the entire
conversion —see page 3).
• You received distributions from a
Roth IRA in 2005 (other than a
rollover, recharacterization, or return
of certain contributions —see
page 7).
Note. If you recharacterized a 2005
Roth IRA contribution as a traditional
IRA contribution, or vice versa, treat
the contribution as having been made
to the second IRA, not the first IRA.
See page 3.
If you have any qualified
hurricane distributions,
CAUTION complete Part I of Form 8915
before you complete Form 8606.

You do not have to file Form
TIP 8606 solely to report regular
contributions to Roth IRAs.
But see What Records Must I Keep?
on page 5.

When and Where To File
File Form 8606 with your 2005 Form
1040, 1040A, or 1040NR. If you are
not required to file an income tax
Cat. No. 25399E

return but are required to file Form
8606, sign Form 8606 and send it to
the Internal Revenue Service at the
same time and place you would
otherwise file Form 1040, 1040A,
or 1040NR.

Definitions
Deemed IRAs
A qualified employer plan (retirement
plan) can maintain a separate
account or annuity under the plan (a
deemed IRA) to receive voluntary
employee contributions. If in 2005
you had a deemed IRA, use the rules
for either a traditional IRA or a Roth
IRA depending on which type it was.
See Pub. 590 for more details.

Traditional IRAs
For purposes of Form 8606, a
traditional IRA is an individual
retirement account or an individual
retirement annuity other than a SEP,
SIMPLE, or Roth IRA.
Contributions. An overall
contribution limit applies to traditional
IRAs and Roth IRAs. See Overall
Contribution Limit for Traditional and
Roth IRAs that begins on page 2.
Contributions to a traditional IRA may
be fully deductible, partially
deductible, or completely
nondeductible.
Basis. Your basis in traditional IRAs
is the total of all your nondeductible
contributions to traditional IRAs minus
the total of all your nontaxable
distributions, adjusted if necessary
(see the instructions for line 2 on
page 6). Keep track of your basis to
figure the nontaxable part of your
future distributions.

SEP IRAs
A simplified employee pension (SEP)
is an employer-sponsored plan under
which an employer can make
contributions to traditional IRAs for its
employees. If you make contributions
to that IRA (excluding employer
contributions you make if you are
self-employed), they are treated as
contributions to a traditional IRA and
may be deductible or nondeductible.
SEP IRA distributions are reported in

Page 2 of 9

Instructions for Form 8606

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the same manner as traditional IRA
distributions.

SIMPLE IRAs
Your participation in your employer’s
SIMPLE IRA plan does not prevent
you from making contributions to a
traditional, SEP, or Roth IRA.

Roth IRAs
A Roth IRA is similar to a traditional
IRA, but has the following features.
• Contributions are never deductible.
• Contributions can be made after
the owner reaches age 701/2.
• No minimum distributions are
required during the Roth IRA owner’s
lifetime.
• Qualified distributions are not
includible in income.
Qualified distribution. Generally, a
qualified distribution is any
distribution made:
• On or after age 591/2,
• Upon death,
• Due to disability, or
• For qualified first-time homebuyer
expenses.
Exception. Any distribution made
during the 5-year period beginning

with the first year for which you made
a Roth IRA contribution or conversion
is not a qualified distribution, and may
be taxable.
Contributions. You can contribute to
a Roth IRA for 2005 only if your 2005
modified adjusted gross income (AGI)
for Roth IRA purposes is less than:
• $10,000 if married filing separately
and you lived with your spouse at any
time in 2005,
• $160,000 if married filing jointly or
qualifying widow(er), or
• $110,000 if single, head of
household, or if married filing
separately and you did not live with
your spouse at any time in 2005.
Use the Maximum Roth IRA
Contribution Worksheet below to
figure the maximum amount you can
contribute to a Roth IRA for 2005. If
you are married filing jointly, complete
the worksheet separately for you and
your spouse.

CAUTION

If you contributed too much,
see Recharacterizations on
page 3.

Maximum Roth IRA Contribution Worksheet (keep for your records)
Caution: If married filing jointly and the combined taxable compensation (defined on
page 3) for you and your spouse is less than $8,000 ($8,500 if one spouse is 50 or
older at the end of 2005; $9,000 if both spouses are 50 or older at the end of 2005),
do not use this worksheet. Instead, see Pub. 590 for special rules.
1 If married filing jointly, enter $4,000 ($4,500 if age 50 or
older at the end of 2005). All others, enter the smaller of
$4,000 ($4,500 if age 50 or older at the end of 2005) or your
taxable compensation (defined on page 3) . . . . . . . . . . . .
2 Enter your total contributions to traditional IRAs for 2005 . .
3 Subtract line 2 from line 1 . . . . . . . . . . . . . . . . . . . . . . . .
4 Enter: $160,000 if married filing jointly or qualifying
widow(er); $10,000 if married filing separately and you lived
with your spouse at any time in 2005. All others, enter
$110,000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5 Enter your modified AGI for Roth IRA purposes (see this
page) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6 Subtract line 5 from line 4. If zero or less, stop here; you
may not contribute to a Roth IRA for 2005. See
Recharacterizations on page 3 if you made Roth IRA
contributions for 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . .
7 If line 4 above is $110,000, enter $15,000; otherwise, enter
$10,000. If line 6 is more than or equal to line 7, skip lines 8
and 9 and enter the amount from line 3 on line 10 . . . . . . .
8 Divide line 6 by line 7 and enter the result as a decimal
(rounded to at least 3 places). If the result is 1.000 or more,
enter 1.000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9 Multiply line 1 by line 8. If the result is not a multiple of $10,
increase it to the next multiple of $10 (for example, increase
$490.30 to $500). Enter the result, but not less than $200 . .
10 Maximum 2005 Roth IRA Contribution. Enter the smaller
of line 3 or line 9. See Recharacterizations on page 3 if
you contributed more than this amount to Roth IRAs for
2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

-2-

1
2
3

4
5

Modified AGI for Roth IRA
purposes. First, figure your AGI
(Form 1040, line 38; Form 1040A,
line 22; or Form 1040NR, line 36).
Then, refigure it by:
1. Subtracting the following.
a. Roth IRA conversions included
on Form 1040, line 15b; Form 1040A,
line 11b; or Form 1040NR, line 16b.
b. Minimum required distributions
from qualified retirement plans
(including IRAs) (for conversions
only).
2. Adding the following.
a. IRA deduction from Form 1040,
line 32; Form 1040A, line 17; or Form
1040NR, line 31.
b. Student loan interest deduction
from Form 1040, line 33; Form
1040A, line 18; or Form 1040NR,
line 32.
c. Tuition and fees deduction from
Form 1040, line 34, or Form 1040A,
line 19.
d. Domestic production activities
deduction from Form 1040, line 35, or
Form 1040NR, line 33.
e. Exclusion of interest from Form
8815, Exclusion of Interest From
Series EE and I U.S. Savings Bonds
Issued After 1989.
f. Exclusion of employer-provided
adoption benefits from Form 8839,
Qualified Adoption Expenses.
g. Foreign earned income
exclusion from Form 2555, Foreign
Earned Income, or Form 2555-EZ,
Foreign Earned Income Exclusion.
h. Foreign housing exclusion or
deduction from Form 2555.
When figuring modified AGI
for Roth IRA purposes, you
CAUTION may have to refigure items
based on modified AGI, such as
taxable social security benefits and
passive activity losses allowed under
the special allowance for rental real
estate activities. See Can You
Contribute to a Roth IRA? in Pub. 590
for details.

Distributions. See the instructions
for Part III that begin on page 7.

Overall Contribution Limit for
Traditional and Roth IRAs

If you are not married filing jointly,
your limit on contributions to
traditional and Roth IRAs is the
smaller of $4,000 ($4,500 if age 50 or
older at the end of 2005) or your
taxable compensation (defined on
page 3). If you are married filing
jointly, your contribution limit is
generally $4,000 ($4,500 if age 50 or
older at the end of 2005) and your

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Instructions for Form 8606

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spouse’s contribution limit is $4,000
($4,500 if age 50 or older at the end
of 2005) as well. But if the combined
taxable compensation of both you
and your spouse is less than $8,000
($8,500 if one spouse is 50 or older
at the end of 2005; $9,000 if both
spouses are 50 or older at the end of
2005), see Pub. 590 for special rules.
This limit does not apply to employer
contributions to a SEP or SIMPLE
IRA.
The amount you can
contribute to a Roth IRA may
CAUTION also be limited by your
modified AGI (see Contributions and
the Maximum Roth IRA Contribution
Worksheet on page 2).
Taxable compensation includes
the following.
• Wages, salaries, tips, etc. If you
received a distribution from a
nonqualified deferred compensation
plan or nongovernmental section 457
plan that is included in Form W-2, box
1, or in Form 1099-MISC, box 7, do
not include that distribution in taxable
compensation. The distribution
should be shown in (a) Form W-2,
box 11, (b) Form W-2, box 12, with
code Z, or (c) Form 1099-MISC, box
15b. If it is not, contact your employer
for the amount of the distribution.
• Self-employment income. If you are
self-employed (a sole proprietor or a
partner), taxable compensation is
your net earnings from your trade or
business (provided your personal
services are a material
income-producing factor) reduced by
your deduction for contributions made
on your behalf to retirement plans
and the deduction allowed for
one-half of your self-employment tax.
• Alimony and separate
maintenance.
See Pub. 590 for details.
Note. Rollovers and Roth IRA
conversions do not affect your
contribution limit.

Recharacterizations
Generally, you can recharacterize
(correct) an IRA contribution or Roth
IRA conversion by making a
trustee-to-trustee transfer from one
IRA to another type of IRA.
Trustee-to-trustee transfers are made
directly between financial institutions
or within the same financial
institution. You generally must make
the transfer by the due date of your
return (including extensions) and
reflect it on your return. However, if
you timely filed your return without
making the transfer, you can make

the transfer within 6 months of the
due date of your return, excluding
extensions. If necessary, file an
amended return reflecting the transfer
(see page 5). Write “Filed pursuant to
section 301.9100-2” on the amended
return.
Reporting recharacterizations. Any
recharacterized conversion will be
treated as though the conversion had
not occurred. Any recharacterized
contribution will be treated as having
been originally contributed to the
second IRA, not the first IRA. The
amount transferred must include
related earnings or be reduced by
any loss. In most cases, the related
earnings that you must transfer are
figured by your IRA trustee or
custodian. If you need to figure the
related earnings, see How Do You
Recharacterize a Contribution in Pub.
590. Any earnings or loss that
occurred in the first IRA will be
treated as having occurred in the
second IRA. You cannot deduct any
loss that occurred while the funds
were in the first IRA. Also, you cannot
take a deduction for a contribution to
a traditional IRA if the amount is later
recharacterized. See below for how to
report the three different types of
recharacterizations, including the
statement that must be attached to
your return explaining the
recharacterization.
1. You converted an amount from
a traditional, SEP, or SIMPLE IRA to
a Roth IRA in 2005 and later
recharacterized all or part of the
amount back to a traditional, SEP, or
SIMPLE IRA. If you only
recharacterized part of the amount
converted, report the amount not
recharacterized on Form 8606. If you
recharacterized the entire amount, do
not report the recharacterization on
Form 8606. In either case, attach a
statement to your return explaining
the recharacterization and include the
amount converted from the
traditional, SEP, or SIMPLE IRA in
the total on Form 1040, line 15a;
Form 1040A, line 11a; or Form
1040NR, line 16a. If the
recharacterization occurred in 2005,
also include the amount transferred
back from the Roth IRA on that line. If
the recharacterization occurred in
2006, report the amount transferred
only in the attached statement, and
not on your 2005 or 2006 tax return
(a 2006 Form 1099-R should be sent
to you by January 31, 2007, stating
that you made a recharacterization of
an amount converted in the prior
year).
-3-

Example. You are married filing
jointly and converted $20,000 from
your traditional IRA to a new Roth
IRA on May 20, 2005. On April 7,
2006, you determine that your 2005
modified AGI for Roth IRA purposes
will exceed $100,000, and you are
not allowed to make a Roth IRA
conversion. The value of the Roth
IRA on that date is $19,000. You
recharacterize the conversion by
transferring that entire amount to a
traditional IRA in a trustee-to-trustee
transfer. You report $20,000 on Form
1040, line 15a. You do not include
the $19,000 on line 15a because it
did not occur in 2005 (you also do not
report that amount on your 2006
return because it does not apply to
the 2006 tax year). You attach a
statement to Form 1040 explaining
that (a) you made a conversion of
$20,000 from a traditional IRA on
May 20, 2005, (b) you
recharacterized the entire amount,
which was then valued at $19,000,
back to a traditional IRA on April 7,
2006, and (c) you recharacterized
because your 2005 modified AGI for
Roth IRA purposes exceeded
$100,000.
2. You made a contribution to a
traditional IRA and later
recharacterized part or all of it to a
Roth IRA. If you recharacterized only
part of the contribution, report the
nondeductible traditional IRA portion
of the remaining contribution, if any,
on Form 8606, Part I. If you
recharacterized the entire
contribution, do not report the
contribution on Form 8606. In either
case, attach a statement to your
return explaining the
recharacterization. If the
recharacterization occurred in 2005,
include the amount transferred from
the traditional IRA on Form 1040, line
15a; Form 1040A, line 11a; or Form
1040NR, line 16a. If the
recharacterization occurred in 2006,
report the amount transferred only in
the attached statement.
Example. You are single, covered
by a retirement plan, and you
contributed $4,000 to a new
traditional IRA on May 27, 2005. On
February 24, 2006, you determine
that your 2005 modified AGI will limit
your traditional IRA deduction to
$1,000. The value of your traditional
IRA on that date is $4,400. You
decide to recharacterize $3,000 of the
traditional IRA contribution as a Roth
IRA contribution, and have $3,300
($3,000 contribution plus $300 related
earnings) transferred from your

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traditional IRA to a Roth IRA in a
trustee-to-trustee transfer. You
deduct the $1,000 traditional IRA
contribution on Form 1040. You are
not required to file Form 8606, but
you must attach a statement to your
return explaining the
recharacterization. The statement
indicates that you contributed $4,000
to a traditional IRA on May 27, 2005;
recharacterized $3,000 of that
contribution on February 24, 2006, by
transferring $3,000 plus $300 of
related earnings from your traditional
IRA to a Roth IRA in a
trustee-to-trustee transfer; and that all
$1,000 of the remaining traditional
IRA contribution is deducted on Form
1040. You do not report the $3,300
distribution from your traditional IRA
on your 2005 Form 1040 because the
distribution occurred in 2006. You do
not report the distribution on your
2006 Form 1040 because the
recharacterization related to 2005
and was explained in an attachment
to your 2005 return.
3. You made a contribution to a
Roth IRA and later recharacterized
part or all of it to a traditional IRA.
Report the nondeductible traditional
IRA portion, if any, on Form 8606,
Part I. If you did not recharacterize
the entire contribution, do not report
the remaining Roth IRA portion of the
contribution on Form 8606. Attach a
statement to your return explaining
the recharacterization. If the
recharacterization occurred in 2005,
include the amount transferred from
the Roth IRA on Form 1040, line 15a;
Form 1040A, line 11a; or Form
1040NR, line 16a. If the
recharacterization occurred in 2006,
report the amount transferred only in
the attached statement, and not on
your 2005 or 2006 tax return.
Example. You are single and
contributed $4,000 to a new Roth IRA
on June 14, 2005. On December 27,
2005, you determine that your 2005
modified AGI will allow a full
traditional IRA deduction. You decide
to recharacterize the Roth IRA
contribution as a traditional IRA
contribution and have $4,200, the
balance in the Roth IRA account
($4,000 contribution plus $200 related
earnings), transferred from your Roth
IRA to a traditional IRA in a
trustee-to-trustee transfer. You
deduct the $4,000 traditional IRA
contribution on Form 1040. You are
not required to file Form 8606, but
you must attach a statement to your
return explaining the
recharacterization. The statement

indicates that you contributed $4,000
to a new Roth IRA on June 14, 2005;
recharacterized that contribution on
December 27, 2005, by transferring
$4,200, the balance in the Roth IRA,
to a traditional IRA in a
trustee-to-trustee transfer; and that
$4,000 of the traditional IRA
contribution is deducted on Form
1040. You include the $4,200
distribution on your 2005 Form 1040,
line 15a.

Return of IRA
Contributions
If, in 2005, you made traditional IRA
contributions or Roth IRA
contributions for 2004 or 2005 and
you had those contributions returned
to you with any related earnings (or
less any loss) by the due date
(including extensions) of your 2005
tax return, the returned contributions
are treated as if they were never
contributed. Do not report the
contribution or distribution on Form
8606 or take a deduction for the
contribution. However, you must
report the distribution and any related
earnings on your 2005 Form 1040,
lines 15a and 15b; Form 1040A, lines
11a and 11b; or Form 1040NR, lines
16a and 16b. Attach a statement
explaining the distribution. You
cannot deduct any loss that occurred
(see Pub. 590 for an exception if you
withdrew the entire amount in all your
traditional or Roth IRAs). Also, if you
were under age 591/2 at the time of a
distribution with related earnings, you
generally are subject to the additional
10% tax on early distributions (see
Form 5329, Additional Taxes on
Qualified Plans (Including IRAs) and
Other Tax-Favored Accounts).
If you timely filed your 2005 tax
return without withdrawing a
contribution that you made in 2005,
you can still have the contribution
returned to you within 6 months of the
due date of your 2005 tax return,
excluding extensions. If you do, file
an amended return with “Filed
pursuant to section 301.9100-2”
written at the top. Report any related
earnings on the amended return and
include an explanation of the
withdrawal. Make any other
necessary changes on the amended
return (for example, if you reported
the contributions as excess
contributions on your original return,
include an amended Form 5329
reflecting that the withdrawn
contributions are no longer treated as
having been contributed).
-4-

In most cases, the related earnings
that you must withdraw are figured by
your IRA trustee or custodian. If you
need to figure the related earnings on
IRA contributions that were made in
2004 or 2005 and were returned to
you, see Contributions Returned
Before Due Date of Return in Pub.
590. If you made a contribution or
distribution while the IRA held the
returned contribution, see Notice
2000-39. You can find Notice
2000-39 on page 132 of Internal
Revenue Bulletin 2000-30 at
www.irs.gov/pub/irs-irbs/irb00-30.pdf.
If you made a contribution in 2004
and you had it returned to you in
2005 as described above, do not
report the distribution on your 2005
tax return. Instead, report it on your
2004 original or amended return in
the manner described above.
Likewise, report on your 2006 tax
return any distribution made in 2006
that is a return of contributions that
were made in 2006 for 2005 (but be
sure that your original or amended
2005 tax return reflects that the
contribution is treated as not having
been contributed).
Example. On May 31, 2005, you
contributed $4,000 to your traditional
IRA. The value of the IRA was
$18,000 prior to the contribution. On
December 29, 2005, when you are
age 57 and the value of the IRA is
$23,600, you realize you cannot
make the entire contribution because
your taxable compensation for the
year will be only $3,000. You decide
to have $1,000 of the contribution
returned to you and withdraw $1,076
from your IRA ($1,000 contribution
plus $76 earnings). You did not make
any other withdrawals or
contributions. You are not required to
file Form 8606. You deduct the
$3,000 remaining contribution on
Form 1040. You include $1,076 on
Form 1040, line 15a, and $76 on line
15b. You attach a statement to your
tax return explaining the distribution.
Because you properly removed the
excess contribution with the related
earnings by the due date of your tax
return, you are not subject to the
additional 6% tax on excess
contributions. However, because you
were under age 591/2 at the time of
the distribution, the $76 of earnings is
subject to the additional 10% tax on
early distributions. You include $7.60
on Form 1040, line 60.

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Return of Excess
Traditional IRA
Contributions
The return (distribution) in 2005 of
excess traditional IRA contributions
for years prior to 2005 is not taxable if
all three of the following apply.
1. The distribution was made after
the due date, including extensions, of
your tax return for the year for which
the contribution was made (if the
distribution was made earlier, see
Return of IRA Contributions on
page 4).
2. The total contributions
(excluding rollovers and conversions)
to your traditional and SEP IRAs for
the year for which the excess
contribution was made did not
exceed:
a. $3,000 ($3,500 if age 50 or
older at the end of the year) for years
after 2001 and before 2005,
b. $2,000 for years after 1996 and
before 2002, or
c. $2,250 for years before 1997.
If your total IRA contributions for
the year included employer
contributions to a SEP IRA, increase
the $3,000 ($3,500, if applicable),
$2,000, or $2,250 by the smaller of
the employer contributions or $40,000
($35,000 for 2001, or $30,000 for
years before 2001).
3. No deduction was allowable
(without regard to the modified AGI
limitation) or taken for the excess
contributions.
Include the total amount distributed
on Form 1040, line 15a; Form 1040A,
line 11a; or Form 1040NR, line 16a;
and attach a statement to your return
explaining the distribution. See the
example in the next column.
If you meet these conditions and
are otherwise required to file Form
8606:
• Do not take into account the
amount of the withdrawn
contributions in figuring line 2 and
• Do not include the amount of the
withdrawn contributions on line 7.
Example. You are single, you
retired in 2002, and you had no
taxable compensation after 2002.
However, you made traditional IRA
contributions (that you did not deduct)
of $3,000 in 2003 and $3,000 in
2004. In November 2005, a tax
practitioner informed you that you had
made excess contributions for those
years because you had no taxable
compensation. You withdrew the
$6,000 and filed amended returns for

2003 and 2004 reflecting the
additional 6% tax on excess
contributions on Form 5329. You
include the $6,000 distribution on
your 2005 Form 1040, line 15a, enter
-0- on line 15b, and attach a
statement to your return explaining
the distribution, including the fact that
you filed amended returns for 2003
and 2004 and paid the additional 6%
tax on the excess contributions for
those years. The statement indicates
that the distribution is not taxable
because (a) it was made after the due
dates of your 2003 and 2004 tax
returns, including extensions, (b) your
total IRA contributions did not exceed
$3,000 ($3,500 if age 50 or older at
the end of 2003) for 2003 or $3,000
($3,500 if age 50 or older at the end
of 2004) for 2004, and (c) you did not
take a deduction for the contributions,
and no deduction was allowable
because you did not have any taxable
compensation for those years. The
statement also indicates that the
distribution reduced your excess
contributions to -0-, as reflected on
your 2005 Form 5329 and it indicates
your adjusted basis in nondeductible
contributions.

Amending Form 8606
After you file your return, you can
change a nondeductible contribution
to a traditional IRA to a deductible
contribution or vice versa. You also
may be able to make a
recharacterization (see page 3). If
necessary, complete a new Form
8606 showing the revised information
and file it with Form 1040X, Amended
U.S. Individual Income Tax Return.

Penalty for Not Filing
If you are required to file Form 8606
to report a nondeductible contribution
to a traditional IRA for 2005, but do
not do so, you must pay a $50
penalty, unless you can show
reasonable cause.

Overstatement Penalty
If you overstate your nondeductible
contributions, you must pay a $100
penalty, unless you can show
reasonable cause.

What Records Must I
Keep?
To verify the nontaxable part of
distributions from your IRAs, including
Roth IRAs, keep a copy of the
following forms and records until all
distributions are made.
-5-

• Page 1 of Forms 1040 (or Forms

1040A, 1040NR, or 1040-T) filed for
each year you made a nondeductible
contribution to a traditional IRA.
• Forms 8606 and any supporting
statements, attachments, and
worksheets for all applicable years.
• Forms 5498 or similar statements
you received each year showing
contributions you made to a
traditional IRA or Roth IRA.
• Forms 5498 or similar statements
you received showing the value of
your traditional IRAs for each year
you received a distribution.
• Forms 1099-R or W-2P you
received for each year you received a
distribution.
Note. Forms 1040-T and W-2P are
forms that were used in prior years.

Specific Instructions
Name and social security number
(SSN). If you file a joint return, enter
only the name and SSN of the
spouse whose information is being
reported on Form 8606. If both you
and your spouse are required to file
Form 8606, file a separate Form 8606
for each of you.

Part I—Nondeductible
Contributions to
Traditional IRAs and
Distributions From
Traditional, SEP, and
SIMPLE IRAs
Line 1
If you used the IRA Deduction
Worksheet in the Form 1040 or
1040A instructions, subtract line 10 of
the worksheet (or the amount you
chose to deduct on Form 1040, line
32, or Form 1040A, line 17, if less)
from the smaller of line 8 or line 9 of
the worksheet. Enter the result on line
1 of Form 8606. You cannot deduct
the amount included on line 1.
If you used the worksheet Figuring
Your Reduced IRA Deduction for
2005 in Pub. 590, enter on line 1 of
Form 8606 any nondeductible
contributions from the appropriate
lines of that worksheet.
If you did not have any deductible
contributions, you can make
nondeductible contributions up to
your contribution limit. Enter on line 1
of Form 8606 your nondeductible
contributions.

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Do not include on line 1
contributions that you had returned to
you with the related earnings (or less
any loss). See page 4.

Line 2
If this is the first year you are required
to file Form 8606, enter -0-.
Otherwise, use the chart below to find
the amount to enter on line 2.
However, you may need to enter
an amount other than -0- or adjust the
amount from the chart if your basis
changed because of any of the
following.
• You had a return of excess
traditional IRA contributions (see
page 5).
• Incident to divorce, you transferred
or received part or all of a traditional
IRA (see the next to last item under
Line 7 that begins on this page).
• You rolled over any nontaxable
portion of your qualified employer
plan to a traditional or SEP IRA.
Include the nontaxable portion on
line 2.
IF the last Form
8606 you filed
was for...

THEN enter on
line 2...

2004, 2003, 2002, The amount from
or 2001
line 14 of that
Form 8606
A year after 1992
and before 2001

The amount from
line 12 of that
Form 8606

A year after 1988
and before 1993

The amount from
line 14 of that
Form 8606

1988

The total of the
amounts on lines 7
and 16 of that
Form 8606

1987

The total of the
amounts on lines 4
and 13 of that
Form 8606

Line 4
If you made contributions to
traditional IRAs for 2005 in 2005 and
2006 and you have both deductible
and nondeductible contributions, you
can choose to treat the contributions
made in 2005 first as nondeductible
contributions and then as deductible
contributions, or vice versa. But the
amount on line 4 cannot be less than
the excess, if any, of the amount on
line 1 over the contributions you
actually made in 2005.
Example. You made contributions
for 2005 of $2,000 in May 2005 and

$2,000 in January 2006, of which
$3,000 are deductible and $1,000 are
nondeductible. You choose $1,000 of
your contribution in 2005 to be
nondeductible. You enter the $1,000
on line 1, but not line 4, and it
becomes part of your basis for 2005.
Although the contributions to
traditional IRAs for 2005 that you
made from January 1, 2006, through
April 17, 2006, can be treated as
nondeductible, they are not included
in figuring the nontaxable part of any
distributions you received in 2005.

Line 6
Enter the total value of all your
traditional, SEP, and SIMPLE IRAs
as of December 31, 2005, plus any
outstanding rollovers. A statement
should be sent to you by January 31,
2006, showing the value of each IRA
on December 31, 2005. However, if
you recharacterized any amounts,
enter on line 6 the total value taking
into account all recharacterizations,
including recharacterizations made
after December 31, 2005.
For line 6, a rollover is a tax-free
distribution from one traditional, SEP,
or SIMPLE IRA that is contributed to
another traditional, SEP, or SIMPLE
IRA. The rollover must be completed
within 60 days of receiving the
distribution from the first IRA. An
outstanding rollover is any amount
distributed after October 31, 2005,
that was rolled over in 2006, but
within the 60-day rollover period.
The IRS may waive the 60-day
requirement if failing to waive it would
be against equity or good conscience,
such as situations where a casualty,
disaster, or other events beyond your
reasonable control prevented you
from meeting the 60-day requirement.
Also, the 60-day period may be
extended if you had a frozen deposit.
See Pub. 590 for details.
Note. Do not include a rollover from a
traditional or SEP IRA to a qualified
employer plan even if it was an
outstanding rollover.
Also include on line 6, any
qualified distributions you repaid
before March 1, 2006, if the
distributions were to be used to
purchase or construct a main home in
the Hurricane Katrina, Rita, or Wilma
disaster area, but that home was not
purchased or constructed because of
Hurricane Katrina, Rita, or Wilma.
Repayments of qualified hurricane
distributions. Subtract the total
amount of repayments of qualified
hurricane distributions you made in
-6-

2005 from the amount you would
otherwise enter on line 6. If the result
is zero or less, enter -0-.
Example. You received a $30,000
qualified hurricane distribution (as the
result of Hurricane Katrina) on
October 15, 2005, from your
traditional IRA. On December 15,
2005, you made a repayment of
$15,000 to your traditional IRA. The
value of all your traditional, SEP, and
SIMPLE IRAs as of December 31,
2005, was $50,000. You had no
outstanding rollovers. You would
enter $35,000 ($50,000 minus the
$15,000 repayment) on line 6.

Line 7
If you received a distribution in
2005 from a traditional, SEP,
CAUTION or SIMPLE IRA, and you also
made contributions for 2005 to a
traditional IRA that may not be fully
deductible because of the income
limits, you must make a special
computation before completing the
rest of this form. For details, including
how to complete Form 8606, see Are
Distributions Taxable? in Chapter 1 of
Pub. 590.

Do not include any of the following
on line 7.
• Distributions that you converted to
a Roth IRA.
• Recharacterizations.
• Distributions that you rolled over by
December 31, 2005, and any
outstanding rollovers included on
line 6.
• Distributions you rolled over to a
qualified employer plan.
• Distributions that are treated as a
return of contributions under Return
of IRA Contributions on page 4.
• Distributions that are treated as a
return of excess contributions under
Return of Excess Traditional IRA
Contributions on page 5.
• Distributions of excess
contributions due to incorrect rollover
information. If an excess contribution
in your traditional IRA is the result of
a rollover from a qualified retirement
plan and the excess occurred
because the information the plan was
required to give you was incorrect,
the distribution of the excess
contribution is not taxable. Attach a
statement to your return explaining
the distribution and include the
amount of the distribution on Form
1040, line 15a; Form 1040A, line 11a;
or Form 1040NR, line 16a. See Pub.
590 for more details.
• Distributions that are incident to
divorce. The transfer of part or all of

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your traditional, SEP, or SIMPLE IRA
to your spouse under a divorce or
separation agreement is not taxable
to you or your spouse. If this transfer
results in a change in the basis of the
traditional IRA of either spouse, both
spouses must file Form 8606 and
show the increase or decrease in the
amount of basis on line 2. Attach a
statement explaining this adjustment.
Include in the statement the character
of the amounts in the traditional IRA,
such as the amount attributable to
nondeductible contributions. Also,
include the name and social security
number of the other spouse.
• Qualified distributions you repaid
before March 1, 2006, if the
distributions were to be used to
purchase or construct a main home in
the Hurricane Katrina, Rita, or Wilma
disaster area, but that home was not
purchased or constructed because of
Hurricane Katrina, Rita, or Wilma.
Qualified hurricane distributions.
Be sure to include on line 7, all
qualified hurricane distributions you
received, even if they were later
repaid.

Line 8
If, in 2005, you converted any
amounts from traditional, SEP, or
SIMPLE IRAs to a Roth IRA, enter on
line 8 the net amount you converted.
To figure that amount, subtract from
the total amount converted in 2005
any portion that you recharacterized
back to traditional, SEP, or SIMPLE
IRAs in 2005 or 2006 (see
Recharacterizations that begins on
page 3). Do not take into account
related earnings that were transferred
with the recharacterized amount or
any loss that occurred while the
amount was in the Roth IRA. See
item 1 under Reporting
recharacterizations on page 3 for
details.

Line 15b
If all your distributions are qualified
hurricane distributions, enter the
amount from line 15a on line 15b. If
you have distributions unrelated to
Hurricanes Katrina, Rita, and Wilma,
as well as qualified hurricane
distributions, you will need to multiply
the amount on line 15a by a fraction.
The numerator of the fraction is your
total qualified hurricane distributions
and the denominator is the amount
from Form 8606, line 7. See the
example below.
Example. You received a
distribution from your traditional IRA
(that you did not roll over) in the

amount of $30,000 on May 1, 2005,
unrelated to Hurricane Katrina, Rita,
or Wilma. On October 15, 2005, you
received a qualified hurricane
distribution (as the result of Hurricane
Rita) from your traditional IRA in the
amount of $10,000. You would report
total distributions of $40,000 on Form
8606, line 7. You would then
complete lines 8 through 14 as
instructed. Form 8606, line 15a,
shows an amount of $36,000. You
would enter $9,000 ($36,000 x
$10,000/$40,000) on line 15b. You
would also enter $9,000 on Form
8915, line 13.

Line 15c
If you were under age 591/2 at the
time you received distributions from
your traditional, SEP, or SIMPLE IRA,
there generally is an additional 10%
tax on the portion of the distribution
that is included in income (25% for a
distribution from a SIMPLE IRA
during the first 2 years). See the
Instructions for Form 1040, line 60.

Part II—2005
Conversions From
Traditional, SEP, or
SIMPLE IRAs to Roth
IRAs
Complete Part II if you converted part
or all of your traditional, SEP, or
SIMPLE IRAs to a Roth IRA in 2005,
excluding any portion you
recharacterized. See item 1 under
Reporting recharacterizations on
page 3 for details.
Limit on number of conversions. If
you converted an amount from a
traditional, SEP, or SIMPLE IRA to a
Roth IRA in 2005 and then
recharacterized the amount back to a
traditional, SEP, or SIMPLE IRA, you
cannot reconvert that amount until the
later of January 1, 2006, or 30 days
after the recharacterization. See Pub.
590 for details.
You cannot convert any
amount to Roth IRAs in 2005
CAUTION if (a) your modified AGI for
Roth IRA purposes (see page 2) is
more than $100,000, or (b) your filing
status is married filing separately and
you lived with your spouse at any
time in 2005. If you erroneously made
a conversion, you must
recharacterize the converted amount.
See Recharacterizations that begins
on page 3.

-7-

Line 16
If you did not complete line 8, see the
instructions for that line. Then, enter
on line 16 the amount you would
have entered on line 8 had you
completed it.

Line 17
If you did not complete line 11, enter
on line 17 the amount from line 2 (or
the amount you would have entered
on line 2 if you had completed that
line) plus any contributions included
on line 1 that you made before the
conversion.

Part III—Distributions
From Roth IRAs
Complete Part III to figure the taxable
part, if any, of your 2005 Roth IRA
distributions.

Line 19
Do not include on line 19 any of the
following.
• Distributions that you rolled over,
including distributions made in 2005
and rolled over after December 31,
2005 (outstanding rollovers).
• Recharacterizations.
• Distributions that are a return of
contributions under Return of IRA
Contributions on page 4.
• Distributions made on or after age
591/2 if you made a contribution
(including a conversion) for 1998,
1999, or 2000.
• Distributions made upon death or
due to disability if you made a
contribution (including a conversion)
for 1998, 1999, or 2000.
• Distributions that are incident to
divorce. The transfer of part or all of
your Roth IRA to your spouse under a
divorce or separation agreement is
not taxable to you or your spouse.
• Qualified distributions you repaid
before March 1, 2006, if the
distributions were to be used to
purchase or construct a main home in
the Hurricane Katrina, Rita, or Wilma
disaster area, but that home was not
purchased or constructed because of
Hurricane Katrina, Rita, or Wilma.
Qualified hurricane distributions.
Be sure to include on line 19, all
qualified hurricane distributions you
received, even if they were later
repaid.
If, after considering the items
above, you do not have an amount to
enter on line 19, do not complete Part
III; your Roth IRA distribution(s) is not
taxable. Instead, include your total
Roth IRA distribution(s) on Form

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Basis in Regular Roth IRA Contributions — Line 22
IF the most recent year
prior to 2005 in which
you took a Roth IRA
distribution* was...

THEN enter on Form
8606, line 22, this
amount...

PLUS the total of all your
regular contributions** to
Roth IRAs for...

2004
(you had an amount on
your Form 8606, line 19)

The excess of your 2004
Form 8606, line 22, over
line 19 of that Form 8606.

2005

2003
(you had an amount on
your 2003 Form 8606, line
19)

The excess of your 2003
Form 8606, line 20, over
line 19 of that Form 8606.

2004 and 2005

2002
(you had an amount on
your 2002 Form 8606, line
19)

The excess of your 2002
Form 8606, line 20, over
line 19 of that Form 8606.

2003 through 2005

2001
(you had an amount on
your 2001 Form 8606, line
19)

The excess of your 2001
Form 8606, line 20, over
line 19 of that Form 8606.

2002 through 2005

2000
(you had an amount on
your 2000 Form 8606,
line 17)

The excess of your 2000
Form 8606, line 18d, over
line 17 of that Form 8606

2001 through 2005

1999
(you had an amount on
your 1999 Form 8606,
line 17)

The excess of your 1999
Form 8606, line 18d, over
line 17 of that Form 8606

2000 through 2005

1998
(you had an amount on
your 1998 Form 8606,
line 18)

The excess of your 1998
Form 8606, line 19c, over
line 18 of that Form 8606

1999 through 2005

Did not take a Roth IRA
distribution* prior to 2005

1998 through 2005

*Excluding rollovers, recharacterizations, and contributions that you had returned to
you.
**Excluding rollovers, conversions, Roth IRA contributions that were recharacterized,
and any contributions that you had returned to you.

1040, line 15a; Form 1040A, line 11a;
or Form 1040NR, line 16a.

Line 20
If you had a qualified first-time
homebuyer distribution from your
Roth IRA and you made a
contribution (including a conversion)
to a Roth IRA for 1998, 1999, or
2000, enter the amount of your
qualified expenses on line 20, but do
not enter more than $10,000.

Line 22
Figure the amount to enter on line 22
as follows.
• If you did not take a Roth IRA
distribution before 2005 (other than

an amount rolled over or
recharacterized or a returned
contribution), enter on line 22 the total
of all your regular contributions to
Roth IRAs for 1998 through 2005
(excluding rollovers and any
contributions that you had returned to
you), adjusted for any
recharacterizations.
• If you did take such a distribution
before 2005, use the chart on this
page to figure the amount to enter.
• Increase or decrease the amount
on line 22 by any basis transferred or
received incident to divorce. Also

-8-

attach a statement similar to the one
explained in the next to last item
under Line 7 that begins on page 6.

Line 23
Generally, there is an additional 10%
tax on 2005 distributions from a Roth
IRA that are shown on line 23. The
additional tax is figured on Form
5329, Part I. See the instructions for
Form 5329, line 1, for details and
exceptions.
Note. The additional 10% tax does
not apply to any qualified hurricane
distributions. See Form 8915 for more
details.

Line 24
Figure the amount to enter on line 24
as follows.
• If you have never made a Roth IRA
conversion, enter -0- on line 24.
• If you took a Roth IRA distribution
(other than an amount rolled over or
recharacterized or a returned
contribution) before 2005 in excess of
your basis in regular Roth IRA
contributions, use the chart on page 9
to figure the amount to enter on line
24.
• If you did not take such a
distribution before 2005, enter on line
24 the total of all your conversions to
Roth IRAs (other than amounts
recharacterized). These amounts are
shown on line 14c of your 1998,
1999, and 2000 Forms 8606 and line
16 of your 2001 through 2005 Forms
8606.
• Increase or decrease the amount
on line 24 by any basis transferred or
received incident to divorce. Also
attach a statement similar to the one
explained in the next to last item
under Line 7 that begins on page 7.

Line 25b
If all your distributions are qualified
hurricane distributions, enter the
amount from line 25a on line 25b. If
you have distributions unrelated to
Hurricanes Katrina, Rita, and Wilma,
as well as qualified hurricane
distributions, you will need to multiply
the amount on line 25a by a fraction.
The numerator of the fraction is your
total qualified hurricane distributions
and the denominator is the amount
from Form 8606, line 21. See the
example on page 9.

Page 9 of 9

Instructions for Form 8606

15:55 - 13-JAN-2006

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Basis in Roth IRA Conversions — Line 24
IF the most recent year
prior to 2005 in which
you had a distribution*
in excess of your basis
in contributions was...

THEN enter on Form 8606, line PLUS the sum of the
24, this amount...
amounts on the
following lines...

2004
The excess, if any, of your 2004 Line 16 of your 2005
(your 2004 Form 8606,
Form 8606, line 24, over line 23**
Form 8606
line 22, was less than line
of that Form 8606.
19 of that Form 8606)
2003
The excess, if any, of your 2003
(you had an amount on
Form 8606, line 22, over line 21
your 2003 Form 8606, line
of that Form 8606.
21)

Line 16 of your 2004
and 2005 Form 8606

2002
The excess, if any, of your 2002
(you had an amount on
Form 8606, line 22, over
your 2002 Form 8606, line
line 21 of that Form 8606
21)

Line 16 of your 2003
through 2005
Forms 8606

2001
The excess, if any, of your 2001
(you had an amount on
Form 8606, line 22, over
your 2001 Form 8606, line
line 21 of that Form 8606
21)

Line 16 of your 2002
through 2005
Forms 8606

2000
(you had an amount on
your 2000 Form 8606,
line 19)

The excess, if any, of your 2000
Form 8606, line 25, over
line 19 of that Form 8606

Line 16 of your 2001
through 2005 Forms
8606

1999
(you had an amount on
your 1999 Form 8606,
line 19)

The excess, if any, of your 1999
Form 8606, line 25, over
line 19 of that Form 8606

Line 14c of your 2000
Form 8606 and line
16 of your 2001
through 2005
Forms 8606

1998
(you had an amount on
your 1998 Form 8606,
line 20)

Line 14c of your 1999
The excess, if any, of your 1998 and 2000 Forms 8606
Form 8606, line 14c, over
and line 16 of your
line 20 of that Form 8606
2001 through 2005
Forms 8606

Line 14c of your 1998,
1999, and 2000
Did not have such a
The amount from your 2005 Form Forms 8606 and line
distribution in excess of
8606, line 16
16 of your 2001
your basis in contributions
through 2004 Forms
8606
*Excluding rollovers, recharacterizations, and contributions that you had returned to
you.
**Refigure line 23 without taking into account any amount entered on Form 8606,
line 20.

Example. You received a
distribution from your Roth IRA (that
you did not roll over) in the amount of
$30,000 on May 1, 2005, unrelated to
Hurricane Katrina, Rita, or Wilma. On
October 30, 2005, you received a
qualified hurricane distribution (as the
result of Hurricane Wilma) from your
Roth IRA in the amount of $10,000.
You would report total distributions of
$40,000 on Form 8606, line 19. You

have no first-time homebuyer
expenses reported on line 20, so you
would also enter $40,000 on line 21.
You would then complete lines 22
through 24 as instructed. Form 8606,
line 25a, shows an amount of
$20,000. You would enter $5,000
($20,000 x $10,000/$40,000) on line
25b. You would also enter $5,000 on
Form 8915, line 14.

-9-

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You are required to give us the
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records relating to a form or its
instructions must be retained as long
as their contents may become
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Internal Revenue law. Generally, tax
returns and return information are
confidential, as required by section
6103.
The average time and expenses
required to complete and file this form
will vary depending on individual
circumstances. For the estimated
averages, see the instructions for
your income tax return.
If you have suggestions for making
this form simpler, we would be happy
to hear from you. See the instructions
for your income tax return.

File Type	application/pdf
File Title	2005 Form 1040
Subject	U.S. Individual Income Tax Return
Author	SE:W:CAR:MP
File Modified	2006-12-30
File Created	2006-12-30