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Adjusted opening balance

Last Updated April 7, 2009

 
Definition

 
For purposes of computing the NIA (net income attributable) on a recharacterization or return of excess IRA  contribution.
 
The fair market value of the IRA at the beginning of the period for which the net attributable income (NIA) is being computed (the computation period), plus the amount of any contributions or transfers made to theIRA during the computation period. For this purpose, the following must be added as long as they were made to the account during the computation period:
 
 
If an IRA is normally valued on a daily basis, these values must be used so that the calculation of the amount of net income attributable to a contribution is based on the actual earnings and losses of the IRA during the time it held the contribution

 

Referring Cite

 
TD 9056, IRS Form 5329
 
 
 

Additional Helpful Information

 
  • If an IRA is not usually valued on a daily basis, the fair market value of the account at the beginning of the computation period is the most recent, regularly determined, fair market value of the account. This is determined as of a date that coincides with or precedes the first day of the computation period. For instance, assume the IRA is not valued on a daily basis but a monthly statement is provided; if the calculation is being done in June, the month-end value on the statement for May would be used as the fair market value for the beginning of the computation period.

 

  • NIA calculations and allocations must be based on the overall value of an IRA and the dollar amounts contributed, distributed or recharacterized to or from the IRA. As a result, the principal amount of regular Roth IRA contributions cannot be protected against adjustment for their pro rata share of net income, including any net losses, during the computation period