dmertz
Level 15
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Retirement tax questions

"However, a couple years ago a financial advisor did something that wasn't very smart and combined a deductible and a non deductible IRA together."

 

Nothing wrong with doing so.  No particular one of your traditional IRAs contains your basis in nondeductible traditional IRA contributions no matter which account received the nondeductible contribution.  The basis belongs to you, not any particular one of your traditional IRAs.  Despite the name of Form 8606, there is no such thing as a nondeductible traditional IRA, only basis in nondeductible contributions that apply to all of your traditional IRAs in aggregate.    Because all of your traditional IRAs are treated in aggregate, it doesn't matter which of the IRAs the QCD was made from.  All that matters is that there were sufficient pre-tax funds in your traditional IRAs (in aggregate).

 

If you correctly indicate to TurboTax that some or all of the distribution from the account from which the QCD was made was QCD, TurboTax will exclude it from Form 8606 entirely and exclude it from Form 1040 line 4b with the "QCD" notation.  If you don't see that, you've entered something incorrectly.

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