My dad passed last year and his IRA CD was inherited by my mom. Using TurboTax Deluxe 2024 on Windows to enter the data for the 1099-R my mom received for this IRA CD created last year, I enter in the distribution and federal withholding amounts and a box 7 code of Death (as example values, I'll use an RMD of $1000, which matches the amount on the 5498 my dad received early last year, and the federal withholding was $200). The next set of screens are:
- Provide answers that the IRA came from the same institution and she was his spouse and he died in 2024
- First question is whether mom put the inherited funds into her own IRA in 2024. I answered Yes because she put the total IRA rolled over amount into her own new IRA. Selecting Yes does not change the amount shown at the top of the screen for her Federal Tax Due.
- Second question is 'You told us that mom rolled over the entire $1000 distribution to another qualified account. We see that $200 was withheld from this distribution. Did mom deposit $200 from your own funds in addition to the $800 mom received from the distribution? Yes/No'
This second question doesn't make sense to me. The first question asked if she put the inherited funds into her own IRA, not what she did with the RMD. When I instead select No for the first question of whether mom put the inherited funds into her own IRA, then the Federal Tax Due amount increases by the $200 RMD amount, which makes it look like it is ignoring the federal income tax already withheld.
Answering Yes to the first question makes sense to me given that the inherited IRA amount was transferred to her new IRA , but the second question resulting from that Yes looks like a TurboTax bug since it states I said that she rolled the RMD amount to another qualified account, which wasn't what the first question asked.
Is there something I'm misunderstanding here? Thanks in advance.
