My wife died in April, 2019. She was age 73, and had been making RMDs since age 70.5. However, she did not make her 2019 contribution before she died. Her IRA account has been retitled in my name (the brokerage firm considers it "Assumed", which is the same as a Spousal IRA). The brokerage firm has calculated what her 2019 RMD was, and I have already made that RMD, under my name and tax ID number, and am planning on paying taxes on the distribution for tax year 2019. The 1099-R for her 2019 RMD will be issued under my name, my tax ID number, and will be coded "7" (Normal Distribution). I will be writing a letter to the IRS explaining the distribution, due to the fact that my RMDs on my IRA do not start until tax year 2020 (I am currently 69). She also has a Form 8606 non-deductible basis, which I understand will carry-forward, and will be combined with my IRA non-deductible Form 8606 basis for 2020.
As it regards TurboTax, I am unsure about some of the mechanics of how to handle this. Questions:
1. On the 1099-R, there are several check boxes under the section "Inherited" IRA. I assume that I ignore all of these boxes, since my IRA is "Assumed"?
2. On Form 8606, do I add her Form 8606 non-deductible basis to mine, as if they were combined from the beginning of 2019, or do I keep them separated until 2020?
3. Do I add the total market value of her traditional IRA to my traditional IRA for tax year 2019 Form 8606 calculation?...or do I keep these separated until next tax year?
4. What date do I use for the date of the market value of the IRAs? Since this is the year of her death, would I use 12/31/2019, or the date of her death in April as the valuation date for the IRAs?
Bottom line...the year that is mechanically causing me the problems is the treatment of the year of her death...2019. I have done a lot of reading on-line about all of this, and am still confused.
