I took a distribution from my non-spouse inherited IRA (with no basis) in 2021, and I have a traditional IRA (with a basis) with zero dollar contribution for the same year. After entering the inherited IRA 1099-R for the distribution, I was trying to see if I can contribute some funds to my own transitional IRA, and here arrives the confusion:
1> Do I need to file a Form 8606 to begin with? I didn't make a nondeductible contribution to or took a distribution from my own IRA nor did I covert part but not all to a Roth IRA.
2> Why my own IRA basis to be part of the inherited IRA distribution tax calculation? Why do they both appear on the same form 8606?
3> Why does the 2021 year-end value of my traditional IRA need to be entered in line 6 while the distribution is from the inherited IRA? Do I enter the value of the inherited IRA instead or do I need to add both of the inherited and the traditional IRAs values together?
I am not a tax expert but something doesn't seem right to me. Can anyone help? I don't want to file the return and got rejected.
Warm Regards,
