I have a client who made distribution from traditional IRA with balance 20,000 and costs basis 10,000.
In 2018, he distributed 1000 reporting 0 taxable income and 9000 remaining basis.
In 2019, he distributed another 2000 reporting 0 taxable income and 7000 remaining basis.
He should have computed the cost basis in the distribution using percentage.
My options are:
a) Amend 2018 and 2019.
b) File accounting change (is this possible? I did not see it as an automatic method).
c) Start to file correctly from 2020, the life time taxable income will come out the same.
If amended return is the answer, what should I do if the wrong method has been used
for the past 10 years?