Amended return - Nondeductible IRA contribution

Client filed a 2018 tax return and took a deduction for a traditional IRA contribution. An amended 2018 return is now being filed that significantly increases income and the traditional IRA contribution is nondeductible.

Is there anyway this can be distributed back to the taxpayer at this date? I understand the 6 month rule, including extensions, but is there anything that allows for this to be returned at a later date when the contribution becomes nondeductible on an amended return?

Can it be treated as a nondeductible IRA on the amended return? Form 8606.

Yes, but that wasn't the intention. Plus, it will likely be forgotten as nondeductible when distributions are taken, so taxes will be paid twice on the income.

Plus, it will likely be forgotten as nondeductible when distributions are taken

Track it in a workpaper that carries forward each year. It's not that difficult.

likely be forgotten

Not if you file an 8606 every year to carry forward the basis.

Can't undo the contribution now but you might want to look into a Roth conversion.

Can't undo the contribution now but you might want to look into a Roth conversion.

Prorata rule.

Right...we don't know what this guy's IRA situation is so OP would have to evaluate the feasibility of a conversion. Just threw it out there.

Client has made deductible traditional IRA contributions in the past, so this would be a nuisance. Taxpayer has a way to go until retirement and I can see this be forgotten.

Taxpayer has a way to go until retirement and I can see this be forgotten.

The only way it will be forgotten is if your firm, or a successor firm, makes a mistake. Are you saying it's likely that your firm will make a mistake in the future? If yes, how can the risk of making the mistake be mitigated?

This can easily be overlooked by a successor firm. Plus, even if not, it's a nuisance.

Outside of preparing an 8606, it takes 5-10 minutes to create a carryforward workpaper and note the carryforward in the client's perm file.

I wouldn't base my decisions, or dedicate one second of thought for that matter, on the possibility of a successor firm making a mistake, but that might just be me. What are the possibilities? What is best for the client? Inform and advise the client. Document the interaction. Move on with the client's choice.

No need to grind the gears to a halt over this, IMHO.