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See sec. 408(d)(3). Accordingly, in 1991 petitioner made a
deposit into the IRA account of $600 from new money for which no
deduction was claimed on their 1991 Federal income tax return.
Accordingly, petitioner has a basis of $600 with regard to said
contribution. Therefore, the record reflects that petitioner has
a total basis in his IRA account contributions of $1,950.
That is not the end of our inquiry, however, for we must
still calculate the amount to be excluded from gross income. The
portion of the distribution that is excludable from income as a
return of basis is determined by multiplying the distribution by
a fraction, the numerator of which consists of the total amount
of the nondeductible contributions (i.e., basis) and the
denominator of which consists of the sum of the following items:
(1) The IRA account balance as of the last day of the tax year in
which the distribution is made ($1,374.53); (2) the amount of the
distribution valued as of the day of the distribution ($6,100);
and (3) any outstanding rollover. Secs. 72(e)(8)(B), 408(d)(1)
and (2); Hall v. Commissioner, T.C. Memo. 1998-336. There is no
indication that there is any outstanding rollover involved in
this case. Accordingly, the amount of excludable basis in the
instant case is computed by multiplying the amount of the
distribution $6,100 by a fraction the numerator of which is
$1,950 and the denominator of which is $1,374.53 plus $6,100,
resulting in an amount excludable of $1,591.40.
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