Thanks so much for clarifying this subject matter as I find it very confusing. Your information assisted me in completing the Form 8606 for my client and reducing the taxable amount accordingly. I have more questions on "Basis" but I will save this for another day after the tax season.

Does tax season ever get easier................this year has been most challenging and making me question why do I do this???? I do like making sure I do things that follow the rules and provide assistance to my clients. 

Hope your remaining tax season goes well!