Pre-tax accounts like an IRA work like this:
Cost basis for an IRA is irrelevant .
You meant the cost basis for traditional Ira also irrelevant? Because it’s pretax contributions, shouldn’t it need the basis when take out to see how much is the profit?
You put money in and don't pay taxes on them. Then when you are over 59.5 you can take the money out but will pay taxes on anything you remove. It makes no difference what the profit is, or the cost basis is. Every dollar you take out you pay taxes on.
Ideally, you put money in when you are in a higher tax bracket compared to when you retire and get to keep the difference. There are some more nuances to all this, but generally, this is how it works. Cost basis does not matter on pre-tax contributions.
Statistics: Posted by EnjoyIt — Sun Jan 25, 2026 11:47 am — Replies 12358 — Views 2448714