Form 8606 line 7 should include all distributions across all Ira’s. Why does it only include one and not all?

[fflem12029]

This is a software bug but I cannot seem to get TurboTax to investigate. There are 2 1099’s but only one is reported. Why?

[dmertz · Accepted solution]

That's not entirely true.  Qualified Charitable Distributions and HSA Funding Distributions are not to be included on line 7.  Also, Roth conversions (a type of IRA distribution) are to be included on line 8, not on line 7.

Also, distributions from retirement accounts that are not IRAs are not to be included on Form 8606.  Only distributions reported on a Form 1099-R that has the IRA/SEP/SIMPLE box marked should appear on line 7 or line 8.  Make sure that you have correctly marked that box on TurboTax's 1099-R form in agreement with the marking of that box on the Form 1099-R provided by the payer.

[fflem12029]

I have Two Ira’s, both qualified with RMDs. I have nondeductible funds in one of the two Ira’s but not the other. Funds from the Ira with  no nondeductible funds is correctly included on line 7 of the 8606. The second ira has qcd amounts. Its taxable portion (I.e. which excludes  QCDs) ,, should be included  in line 7 as well but is not. 

[dmertz]

"I have Two Ira’s, both qualified with RMDs."

I don't know what you mean by that.  Traditional IRAs are not "qualified" or "nonqualified," they are just traditional IRAs.

"I have nondeductible funds in one of the two Ira’s but not the other."

That's an incorrect statement.  Basis in nondeductible traditional IRA contributions applies to all of your traditional IRAs in aggregate.  It does not reside in any particular one of your traditional IRAs.

"The second ira has qcd amounts."

I think that you mean to say that the distribution from the second IRA was partly QCDs and partly not QCDs.  If the entire amount of this distribution was excluded from Form 8606 line 7, it suggests that you have told TurboTax that the entire distribution consisted of QCDs.  I suggest reviewing the responses that you made when entering this Form 1099-R or deleting and reentering this Form 1099-R, making sure to indicate as the amount transferred to charity only the portion that was actually transferred to charity.

Regarding the distribution from the first IRA,  with no portion of this distribution transferred to charity, the entire amount of this distribution should be present on Form 8606 line 7 as long as this distribution was from an IRA, indicated by the IRA/SEP/SIMPLE box being marked.

For anything from these distributions to be included on Form 8606 line 7 under these circumstances, the Forms 1099-R would have to have code 7 in box 7 and the IRA/SEP/SIMPLE box marked.  If there is any other code in box 7 or the IRA/SEP/SIMPLE box is not marked, the distribution reported on that Form 1099-R should not be included on Form 8606 line 7.