Which type of IRA does not require the calculation of a basis?

The Roth IRA is the type of individual retirement account that does not require the calculation of a basis when it comes to distributions. This is because contributions to a Roth IRA are made with after-tax dollars, meaning that taxes have already been paid on the money that is contributed. As a result, when funds are withdrawn from a Roth IRA—qualified distributions, in particular—the amounts can be taken out tax-free, and there is no need to track a basis for tax purposes.

In contrast, traditional IRAs, SEP IRAs, and SIMPLE IRAs involve contributions that may be tax-deductible, which can create a basis that must be tracked over time. With these accounts, since contributions may not have been taxed when the money was contributed, distributions that include both contributions and earnings can lead to taxable income. This necessitates the calculation of a basis to determine how much of the distribution represents taxable income versus the non-taxable contributions.

Thus, due to the nature of how contributions are taxed in a Roth IRA, there is no requirement to calculate or maintain a basis for the account, making it unique among the various types of IRAs.