jtax
Level 10

Deductions & credits

Sorry for your loss.

 

It does sound like the IRA is now in your name. That's fine.

 

You could also titled it as an inherited IRA. In that case the name on the account would be something like John Doe beneficiary Jane Doe. Or the word inherited might be there.

 

If it is not titled as inherited (i.e. is only in your name) then do NOT tell TT that it was an inherited account because inheriting from a spouse is special. You can consider it yours and not inherited. 

 

Look at your joint 2020 return for Form 8606. There should be one with your wife's name/SSN at the top. Line 14 will tell you what her non-deductible "basis" is that carried forward to 2021. Each year when there is a distribution from the IRA some of that basis is used up. That is calculated on form 8606.

 

If the 1099-R for 2021 was in your wife's name/SSN, then report it on your joint 2021 1040 as hers. She will have a form 8606 generated.

 

If the 1099-R is not in her name or for future years, add the non-deductible basis to your non-deductible basis and tell TT about it when asked. In future year's the 8606 will be in your name/SSN and will include both your basis and your wife's because from now on it will all be considered yours.

 

if you left the IRA as an inherited IRA, it is separate from yours. In that case you will have a form 8606 that is not in your name (it's not your personal IRA). Rather the name on the 8606 will be "John Doe bene Jane Doe" or similar. Unless something has changed this year, that is unfortunate because TT does not support efiling 8606s for inherited IRAs (unless it was from your spouse and you rolled it over into your name only).

 

Each year I find it a good idea to be sure the 8606 is correct and the carryforward worked correctly. I recently discovered that somehow my basis had not been carried forward one year and I had to correct it.

 

If this doesn't make sense, please ask again and I'll try to explain.

 

This is the interview screen for the basis question for inherited IRAs. The regular IRA interview should be very similar.

 

 

 

 

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