In general, IRS Form 8606 is filed to report activity of nontaxable assets in your IRA. For example, Form 8606 is required, if any of the following occurred during the last year:
- If you made a contribution to your traditional IRA and you claimed a tax deduction for all or a portion of it.
- You had after-tax amounts in your IRA from IRA contributions for which you did not claim a deduction, or rollovers of after-tax amounts from your 401(k) or 403(b) plan, and you took a distribution from any of your traditional IRA, SEP IRA or SIMPLE IRA.
- You converted amounts from your traditional IRA, SEP IRA or SIMPLE IRA, unless the entire amount was recharacterized (reversed), or
- You received a distribution from your Roth IRA.