Pre-87 nondeductible contribuitons in IRA

[bdeancpa]

In a qulified plan, under certain conditions you are allowed to withdraw any pre 1987 after tax contributions first (amounts representing basis) before any earnings have to be withdrawn. With amounts contributed after 1986 you must withdraw the after tax contribuitons (basis) and income pro rata. The support for withdrawing the after tax contribuitons first on amounts contriubuted pre-87 comes from Code Sec. 72(e)(8)(D). Code Sec. 408(d), dealing with IRA distribuitons indicates the Code Sec. 72 rules will apply regarding the taxation of IRA distribuitons unless something else in 408 overrides. I see nothing in 408 that would prevent pre-87 after tax amounts that have been rolled out of a qualified plan and into an IRA for being aforded the same treatment they would have been afforded in the qualified plan, that is they can be withdrawn first, prior to any imcome being taken. Am I right in this conclussion or have I missed something?

If I am right, it appears the 8606 form is not set up to take this into consideration. Any suggestions for how to report this type of distribuiton?

Thanks in advance for your help.

Dean Huber