This is a bug in TurboTax. See workaround here: https://ttlc.intuit.com/community/retirement/discussion/re-inherited-ira-gross-amount-flows-to-my-form-8606/01/1839785#M118459
The workaround goes away though after you save/close/re-open the file though, so I'm not sure what actually gets sent to the IRS when you eFile. Hopefully, TT will fix soon.
thanks so much for response. i tried the "workaround" but it did not work for me.
I think in any case it's probably better to wait for the bug fix (assuming a bug fix is in-progress) than to use the workaround, particularly since the workaround doesn't work for you. In my case, I'm pretty sure my return showed correctly when I eFiled (using the workaround), but the file now shows incorrectly, as does my PDF.
So my $0.02 is that it'd be better for the bug to be fixed and for you to know that your .tax file and return to be in a consistent "state", than for you to be in my situation which is that I don't know exactly what was sent to the IRS...
i agree with you. thanks so much for help. i wonder if any tt people are working on this.
See my own post on the topic. I tried calling support to ask / inquire about this. They said they would create a case and submit as a bug... but then my case was resolved. So presumably they know, but who knows?
Note: I've subscribed to three or four of the topics on this community that flag this issue on the assumption that once it's fixed, someone will post that it's fixed and we can all go file or fix our returns!
Please note that as dmertz and macuser_22 have noted elsewhere, the issue is that in this situation (two IRAs, one inherited), the basis for the two IRAs should not be conflated. Unfortunately, at present, TurboTax creates only one 8606, when it needs to create two.
I mention this because, as noted above, your results will change every time you run through the 1099-R interview, depending on which 1099-R you are working on and whether or not you left the 1099-R partway through when it shows you the table of 1099-Rs and asks if you want to enter another one (as it turns out, this is not the end of the 1099-R interview).
Bear in mind that there is only one 8606 when you are re-running through the 1099-R, i.e., the basis will be the basis of the last 1099-R you did.
As macuser_22 says elsewhere, once you are happy with the result, don't go through the 1099-R interview again.
Yes, when the issue is resolved, we would be delighted to state this in these posts.
Got it. I think in my particular case, I don't have a basis in my inherited IRA, so there should only be one 8606. But to your point, they are conflated today. And agree, we will all be delighted to have it resolved!
thanks so much for the response. would you have an eta for resolution?
I tried to get this from TT Support, unsuccessfully. But during my call, they said they were creating a bug (I was surprised that wasn't there). So it might be worth others calling and seeing if they have a bug filed and an ETA.
@BillM223 would you have an ETA for this fix? Hoping it is this tax year.
No, we in the Community are not given the status of an issue until the issue is identified, reproduced by the development staff, and then scheduled - and I am sure that you are aware that the programming staff is really under the gun because of all the last minute changes coming out of Congress, the IRS, and the states.
I know that this is not the answer you want but it is all I have.
TurboTax has never had the ability to create a Form 8606 for a distribution from an inherited IRA and likely never will, at least not for the foreseeable future. The bug fix that everyone is awaiting will just be to restore the TurboTax behavior on the Form 8606 for the taxpayer's own IRAs that was correct in 2019 TurboTax but was broken with the initial release of 2020 TurboTax.
For inherited IRAs, TurboTax requires that the user to separately calculate the taxable amount when the inherited IRA has basis in nondeductible traditional IRA contributions and just enter the resulting taxable amount.
I’m also experiencing the same issue. It’s very disappointing that I can’t file until it’s fixed. TurboTax support refuses to even admit that the bug exists.
I did call today and they seem to admit this is issue that they are working to resolve. They did not have an eta but again they did seem to understand that they have issue that must be fixed. Personally, I may try a different software product (credit karma or tax slayer) and will give these guys only a couple weeks to fix.
for record, bradmoon and blv.moon2 are the same persons.
i did complete a return using credit karma, and credit karma seems to handle the inherited ira correctly. the return they produce does not contain the many worksheets that turbotax contains, so i'd prefer to continue using turbo tax. however, if turbo tax does not fix issue in next couple weeks, there is a place that will handle the situation correctly.
oh BTW ... tt attempts to tax the entire inherited ira gross distribution amount and does NOT use the entered taxable amount. this is again incorrect in tt but correct in credit karma. tt did this correctly in 2019. sure hope tt gets this fixed in their 2020 product quickly as this reflects poorly on them given that i spent $140 on their product and credit karma is 100% free.
The error you are experiencing is connected with entries on Form 8606. Please see this link to sign up for updates related to this issue: Why Am I Getting a "Check This Entry" Error Related to For 8606?