If both spouses took IRA distributions, both have non-deductible basis and the IRA info wks data is correct for both spouses, why is the 8606-T created but not 8606-S?

Forum|Forum|5 years ago
March 7, 2021
5 replies
30 views

IRA Info Worksheet has values in lines 1, 2, and 3 for both Taxpayer and Spouse. Both has basis carryover from 2019. Both taxpayers took distributions from their IRAs. The values in the IRA Info Worksheet are accurate. But only the 8606-T is generated. I cannot get the 8606-S to generate.

Best answer by cindydi

The distribution code seems to be the answer, even though I don't see Inherited IRA distributions listed as a reason to not count them for the 8606. To test this theory, I just manipulated the spouse's 1099-R, changing the distribution code from 4 (death) to 7 (normal), which caused our refund value to increase and created an 8606-S. When I changed the distribution back to the correct value of 4, the refund value decreased to the earlier value and the 8606-S form disappeared. It would be nice if Turbotax continued to the screen that allowed the customer to view and answer the question about having made nondeductible IRAs, then tell the customer that it will be treated differently because it's from an Inherited IRA. Or created a screen that said because the taxpayer / spouse had distributions only from Inherited IRAs, form 8606 does not apply. I have spent many hours trying many thing including repeating imports and adding in a fake IRA overcontribution to try to figure this out. The IRS forms that don't mention that Inherited IRAs don't count were not helpful unfortunately, so I'm hoping Turbotax will fill in the gap!

macuser_22

Alumni - Champ

Be sure you chose the proper spouse for the 1099-R. Edit it to be sure it is assigned to the proper 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.**

C

cindydiAuthor

Level 2

I have verified that all IRA distributions are correctly assigned to the correct person. Thanks for that, as in one of my earlier reviews I did notice that Spouse's distribution had been tagged as Taxpayer's, but when I corrected it, it didn't create an 89606-S. The 1099-R Summary reflects Total gross distributions from Box 1 of Form 1099-R has values for both spouses. Taxpayer had a normal distribution, Spouse had a distribution from an Inherited IRA. Is that the reason? Even though a distribution from an Inherited IRA is taxable, is it treated differently than a regular distribution regarding form 8606?

C

cindydiAuthorAnswer

Level 2

The distribution code seems to be the answer, even though I don't see Inherited IRA distributions listed as a reason to not count them for the 8606. To test this theory, I just manipulated the spouse's 1099-R, changing the distribution code from 4 (death) to 7 (normal), which caused our refund value to increase and created an 8606-S. When I changed the distribution back to the correct value of 4, the refund value decreased to the earlier value and the 8606-S form disappeared. It would be nice if Turbotax continued to the screen that allowed the customer to view and answer the question about having made nondeductible IRAs, then tell the customer that it will be treated differently because it's from an Inherited IRA. Or created a screen that said because the taxpayer / spouse had distributions only from Inherited IRAs, form 8606 does not apply. I have spent many hours trying many thing including repeating imports and adding in a fake IRA overcontribution to try to figure this out. The IRS forms that don't mention that Inherited IRAs don't count were not helpful unfortunately, so I'm hoping Turbotax will fill in the gap!