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Recently I’ve received emails from a few different readers on the topic of tracking basis in a Roth IRA. That is, with a Roth IRA, you can remove contributions tax-free and penalty-free at any time, but how do you know (and how can you prove to the IRS) how much you have contributed over the years?
The easiest answer is to keep the Form 5498 that the brokerage firm sends you every year. It reports all the contributions and conversions for the year in question.
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