Form 8606, IRA "BASIS"

virginia..I took a distribution from traditional ira for first-time purchase of a home. this is the first time filing a form 8606..how can i declare past nondeductible contributions and figure what my cumulative past ira "basis" is??

Most people do not make nondeductible contributions to their IRAs, so if you are like them, you have not made such contributions.

However, the rule is that if you do not report nondeductible contributions each year on Form 8606, all of the contributions to your traditional IRA will be treated as deductible. All distributions from your IRA will be taxed unless you can show, with satisfactory evidence, that nondeductible contributions were made.

So, in your case, you would have to show with satisfactory evidence, that nondeductible contributions were made. To find out what evidence the IRS wants, read the section in the Instructions to Form 8606 entitled “What Records Must I Keep ((page 5 of the Instructions to Form 8606).