You must use a separate Form 8606 calculation to determine the taxable portion using the basis in the inherited IRA.
The problem is the software won't enter the correct Name:
And it won't handle the case where you too have a basis in your IRA and took a distribution.
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you can calculate the taxed portion on Form 8606 yourself to discover the proper amount for 1099-R box 2a.
you can start a separate tax return in desktop TurboTax and use that one to calculate the Inherited IRA taxed portion.
Then you have to fudge up a 1099-R that produces those amounts on Form 1040.
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Do you have the correct taxable amount on Line 4b?
E-file your return, don't file on paper.
After it is ACCEPTED ,
get Form 1040-X from IRS website and mail it in with your 8606, which you can also get in fillable PDF.
Note: since you are not changing any dollar amounts on your amended tax return, you can leave all the lines 1-23 EMPTY.
The names on 8606 should be "<owner> and <your name> BENE" or Beneficiary if it fits, and your SSN.
Part III explanation: "didn't include Form 8606 with e-File".
You will have to mail it so this does not use up your one 1040-X e-File.
In a few months to a year, you will get an acknowledgement from the IRS.
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you can calculate the taxed portion on Form 8606 yourself to discover the proper amount for 1099-R box 2a.
you can start a separate tax return in desktop TurboTax and use that one to calculate the Inherited IRA taxed portion.
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