Until the year-end Fair Market Value of the individual's traditional IRAs is entered, TurboTax assumes that the FMV is zero and calculates on Form 8606 an incorrectly high nontaxable amount of the individual's traditional IRA distributions and Roth conversions. Once the individual's year-end value in traditional IRAs is entered, TurboTax recalculates to determine the correct, lower nontaxable amount of these distributions, raising the previously incorrect AGI and taxable income to the proper amount.
