For a Backdoor Roth IRA, Does the Pro Rata Rule Factor in Inherited IRAs?

[J Vincent]

Hi Intuit Community,

I plan to do a backdoor Roth IRA by opening a traditional IRA with non-deductible contribution max and then converting it to a Roth. But, I have one question because I have an inherited IRA. So, I'm now trying to find out if my inherited IRA would get factored into the pro rata rule. 

I found a community discussion on this topic from 2020 that says inherited IRA's do not go into the pro rata calculation:

https://accountants.intuit.com/community/proseries-tax-discussions/discussion/backdoor-roth-and-inhe...

So, I just want to make sure this is the rule at present. Also, the third from bottom entry references the Proseries Basic as a source for this answer. But the entry does not include a link or the exact wording from the Proseries Basic. So, can someone please provide that link or a cut and past of the relevant section?

thanks,

J Vincent

[DanaB27]

Assuming that the inherited IRA wasn't your spouse's and you chose to treat it as your own, you will have to file a separate Form 8606 for the inherited IRA and therefore pre-tax funds in the inherited IRA won't affect the Backdoor Roth procedure. 

"IRA with basis. If you inherit a traditional IRA from a person who had a basis in the IRA because of nondeductible contributions, that basis remains with the IRA. Unless you are the decedent's spouse and choose to treat the IRA as your own, you can't combine this basis with any basis you have in your own traditional IRA(s) or any basis in traditional IRA(s) you inherited from other decedents. If you take distributions from both an inherited IRA and your IRA, and each has basis, you must complete separate Forms 8606 to determine the taxable and nontaxable portions of those distributions." (Pub 590-B)