Final answer:
TRUE. A participant can have an adjusted basis of $0 in nondeductible contributions to a traditional IRA.
Step-by-step explanation:
A participant can have an adjusted basis of $0 in nondeductible contributions to a traditional IRA.
When making contributions to a traditional IRA, there are two types of contributions: deductible and nondeductible. Deductible contributions are made with pre-tax income and are therefore tax-deductible, while nondeductible contributions are made with after-tax income and are not tax-deductible.
In this case, the participant has an adjusted basis of $0 in nondeductible contributions, indicating that they did not contribute any after-tax income to their traditional IRA.