When I receive rmd from the IRS, how can i calculate the amount which was non deductible traditional IRA?

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Casey Epton, CPA, is a Senior Tax Advisor at Deduction, where he helped design Taylor, CPAI from day one, building an AI tax agent that works seamlessly for both clients and the CPAs who verify every return.

Last updated:

Sep 2026

The IRS does not send you an RMD amount. While your financial institution (the custodian) will usually calculate it for you and may send a notice, you are legally responsible for the math. If you have multiple IRAs, the calculation gets more complex because of the Aggregation Rule.

Calculating the Non-Taxable Portion of Your IRA Distribution

When you take an RMD (or any distribution) from a traditional IRA and you've made nondeductible contributions, you must use Form 8606 to calculate the tax-free portion. The IRS requires you to apply the pro-rata rule, you cannot simply withdraw just your nondeductible contributions tax-free.

Pro-Rata Rule

Under the pro-rata rule, you divide the total of the taxable amount in all of your IRAs by the total of all of your IRAs. IRS This determines what percentage of each distribution is taxable vs. non-taxable.

The Formula (Form 8606, Part I)

Nontaxable Percentage = Total Basis ÷ (Year-End IRA Value + Distributions)

Example:

Total nondeductible contributions (basis): $20,000
Year-end value of all traditional IRAs: $180,000
RMD taken: $20,000

Calculation:

$20,000 ÷ ($180,000 + $20,000) = $20,000 ÷ $200,000 = 10%
Non-taxable portion of RMD: $20,000 × 10% = $2,000
Taxable portion: $20,000 × 90% = $18,000

All traditional IRAs are aggregated. Your basis in traditional IRAs is the total of all your nondeductible contributions and your nontaxable amounts included in rollovers made to these IRAs minus the total of all your nontaxable distributions. This includes traditional IRAs, SEP IRAs, and SIMPLE IRAs, you cannot isolate one account.

You need your prior year Form 8606. Your current basis comes from line 14 of your most recent Form 8606 (or accumulated records of all nondeductible contributions if you've never filed one).

Year-end value matters. You use the December 31 value of ALL your traditional IRAs, even if you took the distribution earlier in the year.

For 2026, ensure you use the values as of December 31, 2026.

Nontaxable Fraction=Year-end Value of ALL IRAs+Distributions Taken in 2026Total Basis (Total Nondeductible Contributions)

Total Basis: Found on Line 14 of your last filed Form 8606.
Year-end Value: This must include the total balance of all Traditional, SEP, and SIMPLE IRAs you own.

The "Aggregation Rule"

One of the most common mistakes is trying to take the "nontaxable" money from just one account. The IRS views all your non-Roth IRAs as one giant bucket.

Account Type	Included in Pro-Rata Calculation?
Traditional IRA	Yes
SEP IRA	Yes
SIMPLE IRA	Yes
Inherited IRA	No (Calculated separately)
Roth IRA	No
401(k) / 403(b)	No

Keep Records

If you inherit a traditional IRA from a person who had a basis in the IRA because of nondeductible contributions, that basis remains with the IRA. If you take distributions from both an inherited IRA and your own IRA, and each has a basis, you must complete separate Forms 8606.

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