Hiimmel
New Member

Form 8606, Ln 6 includes the 12/31/17 balance of my inherited IRA (Code 4 Death), but the distribution amount is not included on Ln 7.

 

Retirement tax questions

Line 6 should NOT include any inherited IRA's at all.  Only *your* IRA's in your name are totaled for line 6.  Inherited IRA's must be kept in the name of the deceased with you as beneficiary.   Any basis in a inherited  IRA must be tracked separately on a separate 8606 for the inherited IRA and not your own 8606.   The basis in an inherited IRA cannot be combined with your own basis.

If there is a basis in the inherited IRA then TurboTax does not support a separate 8606. You would need to download a blank 8606 form from the IRS, fill it out, and attach it to a mailed tax return.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**

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Retirement tax questions

One exception to the above:  If you inherited from a spouse then you can elect to treat it as your own IRA and have the IRA custodian roll it into your own IRA.  At that point it would no longer be an inherited (code 4) IRA but your own IRA.  That can only be done if inherited from a spouse.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
jessicahc
Returning Member

Retirement tax questions

Distribution code is 4 on Form 1099-R (Inherited IRA, Non-spouse, No Basis) and the distribution amount is on MY Form 8606 (I have a basis of my own) Line 7. Is this correct? I think it is because I have to pay taxes on the distribution. But I understand from the reply that the value of Inherited IRA should NOT be included on Line 6.

Retirement tax questions

@jessicahc - answered in your other post.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**