I reported this same issue on a different thread, and as some have reported, the workaround is temporary. The incorrect entry shows up again once TT is reopened. I just reported this bug AGAIN to Turbo Tax - long time on hold, long discussion with agent, etc. They are supposed to email me when the fix has been completed, but I'm not holding my breath. If I hear anything, I will try to report it on the Community board.
Here is my plan if this doesn't get resolved before filing deadline: Since the workaround of toggling the deductible/non-deductible contribution button on the IRA provides a temporary fix, the agent thought there shouldn't be a reason why we can't e-file while the file is open and the information is correct (no guarantees, but thought it would work.) That way, at least the correct information will be transmitted to the IRS. Since the glitch erroneously uses part of one's personal traditional IRA cost basis when it includes the inherited amount on Line 7 of the 8606 (where it doesn't belong), next year's carryover cost basis on TT will likely not reflect the correct cost basis. You will have to remember to update the cost basis next year. It appears to be a user entry option, but it does ask for an explanation of why the cost basis is different than Turbo Tax's calculations. What I don't know is whether the carryover cost basis remains corrected once you do the manual update next year or if we'll be stuck doing this every year. The way I figure it, if you do a manual override on the forms and get the red exclamation point which will prohibit you from e-filing, you will still have the incorrect cost basis carryover to deal with either way. Much better if TT fixes the error.
