Form 8606 - missing IRA distribution data (not backdoor Roth related)

[love-the-irs]

Form 8606 is missing IRA distribution data entered into Turbotax. Note – this does not relate to a backdoor Roth.

Re: Turbotax online version.

An IRA distribution was reported on a 1099-R (distribution code 4, IRA box checked). The 1099-R was entered into TurboTax, and the distribution is included as taxable income (line 4b of the 1040).

Form 8606 was generated by Turbotax. Line 7 should include the traditional IRA distribution. Line 7 is zero; the IRA distribution is not included. Line 8, Roth IRA conversions, is correct. Since the IRA distribution is omitted, the nontaxable portion of the IRA distributions is understated. (line 13 of 8606)

What updates are required to ensure Form 8606 generated by TurboTax captures the IRA distribution income?

[dmertz · Accepted solution]

TurboTax is behaving correctly.  The Forms 8606 prepared by TurboTax are only for your own (and your spouse's, if filing jointly) IRAs.  Nothing related to an inherited IRA is includible on these Forms 8606.  If the decedent had basis in nondeductible traditional IRA contributions, you must calculate the nontaxable and taxable amounts of this distribution outside of TurboTax as tell TurboTax the taxable amount of this distribution.