In the online version of TurboTax, when you enter a code-4 Form 1099-R with the IRA/SEP/SIMPLE box marked and answer Yes when asked if this distribution is from an inherited IRA and you indicate that you did not transfer the funds into your own IRA, TurboTax will ask, "Did you have nondeductible contributions for this IRA." In this case TurboTax is asking if the decedent had nondeductible contributions in the IRA. When you answer Yes, TurboTax will ask you to enter the calculated taxable amount which you will obtain from the Form 8606 that you prepare outside of TurboTax.
There is no way to integrate the externally prepared Form 8606 within TurboTax other than supplying the calculated taxable amount. Providing the externally prepared Form 8606 to the IRS (which the instructions for Form 8606 indicate must be filed under these circumstances) requires mailing.
