The numerator equals your cumulative nondeductible contributions as of the end of the year. The denominator equals your IRA balance on that date plus all withdrawals taken during the year. Then multiply withdrawals by the fraction. The result is the amount of tax-free withdrawals of basis. The rest of your withdrawals are taxable. Example 2: As of Dec. 31, 2013, you had made $18,000 in nondeductible contributions to your two traditional IRAs. You also have a rollover IRA that was funded with a distribution from your former employerâs 401(k). During 2013, you withdrew $28,000.