Form 8606 Non-Deductible IRAs

Forum|Forum|2 years ago
February 18, 2024
8 replies
65 views

Background

I have a larger traditional IRA with a small non-deductible portion. I converted part of this traditional IRA to a Roth IRA this past year, in 2023, so I must file Form 8606. This is the second time I have converted some of this IRA to a Roth, so the second Form 8606 I have done.

Also, I have had an inherited traditional IRA that I have had to take RMDs for several years.

My Question
Unlike the first time I did a Roth conversion, TurboTax is putting the inherited IRA RMD distribution in line 7 and the product of the RMD distribution times line 10 in line 12! This seems odd that the inherited IRA is getting mixed in here with my IRA and it seems to conflict with what TurboTax did in 2020 for my first Roth conversion.

Does this make sense? Does anyone have any thoughts or hopefully solutions?

Thank you!!

dmertz

Level 15

A Form 1099-R for a distribution from an inherited traditional IRA has code 4 in box 7. When entering this Form 1099-R, make sure to answer Yes when ask if this IRA was inherited. Doing so will prevent TurboTax from including the distribution on your Form 8606.

Coach209Author

Level 2

I checked this box 7 on the 10699-R and it is marked correctly with a 4" for "death." However, TurboTax still shows distribution from my inherited IRA on line 7.

Any other ideas?? I appreciate your help!

dmertz

Level 15

For TurboTax to actually treat code 4 as meaning inherited, when asked on the pages that follow the entry of the Form 1099-R details, you must explicitly tell TurboTax that the distribution was from an inherited account. If you don't do that, TurboTax will (for no good reason) treat code 4 as if it was code 2 or 7.