dmertz
Level 15

Retirement tax questions

TurboTax assumes that a code 4 Form 1099-R reporting a distribution to a spouse beneficiary was either all rolled over or none was rolled over.  You'll need to split the Form 1099-R into two, one for the portion rolled over and the other for the portion that was RMD and not rolled over.

 

Complicating matters is the issue of the after-tax basis in nondeductible traditional IRA contributions that your spouse had.  TurboTax requires you to separately calculate the taxable and nontaxable amounts of a code 4 distribution when there is basis, then just enter the taxable amount.  The calculation can be done on a Form 8606 separate from the ones for owned IRAs, marked to indicate that it is for the distribution from an inherited IRA, then include it with your mailed tax return, or just include the same calculation on a separate explanation statement that you include with your mailed tax return.  Whatever basis remains after determining the taxable amount of the RMD distribution transferred to your own IRA along with the rollover and you'll need to enter that as an adjustment to your own basis.