You would need to refigure the taxable and nontaxable amounts of each of the distributions taken as beneficiaries, carrying forward the remaining basis after each. It's too late to claim a refund of the excess tax paid for 2021, but there is still time to amend the 2022, 2023 and 2024 tax returns to claim refunds.
As fanfare mentioned, you would complete Forms 8606 outside of TurboTax to calculate the nontaxable and taxable amounts, and the amount of basis that carries forward each year.
And to be clear, the present basis is not what was carried forward from 2020. The basis applied proportionately to each of the distributions that were made to beneficiaries whether claimed correctly or not. That's why you need to prepare 2021, 2022, 2023 and 2024 Forms 8606 to determine the amount of basis that carried into 2025. You are not permitted to pick and choose which years to apply basis. It must be factored into determining the nontaxable and taxable amounts of every distribution.
