Form 8606

[purplefan]

In 2008 my husband and I both made nondeductible contributions to a traditional IRA.  We both filed form 8606 in 2008.  TurboTax has been keeping track of those nondeductible contributions every year since then.  In 2018 I inherited an IRA from my mother that also had a basis because of nondeductible contributions.  I took my first RMD in 2019.  I know that I am required to keep the inherited IRA calculations and form 8606 separate from all other IRA calculations and forms 8606.   A small portion of that distribution is nontaxable to me.  I know how to figure the nontaxable amount on form 8606.  However TurboTax wants to put the information on the form 8606 that applies to my own original nondeductible IRA contributions from 2008.  How do I get TurboTax to complete a separate form 8606 for the inherited IRA so that it will be part of my efiled return when I am ready to file my return?  And I will need TurboTax to keep 2 separate forms 8606 each year so that I can keep my own nondeductible IRA calculations separate from the inherited IRA calculations.

[macuser_22]

The 8606-T (Taxpayer) and 8606-S (spouse) are only for your own IRA accounts and not for any inherited accounts that must be kept in the name of the deceased.   TurboTax does not support a 8606 for an inherited IRA.

The 1099-R for an inherited IRA should have a code 4 in box 7 and should not try to fill out a 8606-T or 8606-S.

You must download the 8606 form form the IRS and fill it out manually and attach it to your mailed tax return.

The 2019 8606 can be downloaded here"

https://www.irs.gov/pub/irs-pdf/f8606.pdf

https://www.irs.gov/pub/irs-pdf/i8606.pdf

[fanfare]

If the inherited basis is small, and/or you are willing to forgo the exclusion of the basis reduction

and pay the tax, just enter the 1099-R and indicate no basis.

[purplefan]

Thank you both for your answers. I hate the idea of attaching the form 8606 and mailing my return every year. Also the amount of basis to take each year is small. For that reason I have decided to show the whole RMD as taxable so that I can continue to file electronically each year. 

[love-the-irs]

TurboTax does not support a 8606 for an inherited IRA.

BOO - Turbotax needs to address this issue or customers will use other solutions.

[DaveF1006]

@love-the-irs It's true that this is a known issue if you are using the Desktop software but it does work in the online version of Turbo Tax.

[macuser_22]

---

@love-the-irs wrote:

TurboTax does not support a 8606 for an inherited IRA.

BOO - Turbotax needs to address this issue or customers will use other solutions.

---

This is because an inherited IRA is not in the name of the taxpayer or spouse but must be kept in the name of the deceased.

TurboTax has a FAQ that addresses this.

https://ttlc.intuit.com/community/accessing/help/where-do-i-find-form-8606/00/25713

[quote]

Where do I find Form 8606?

We'll automatically generate and fill out Form 8606 (Nondeductible IRAs) if you reported any of these on your tax return:

• Nondeductible contributions made to a traditional IRA
• Distributions from a traditional, SEP or SIMPLE IRA that had nondeductible contributions (excluding rollovers, conversions, recharacterizations, qualified charitable distributions, one-time distribution to fund an HSA, or return of certain contributions)
• Conversions from a traditional, SEP, or SIMPLE IRA to a Roth IRA
• Distributions from a Roth IRA (other than rollovers, recharacterizations, or a return of certain contributions)

However, if any of these 3 situations apply to you:

1. You received a distribution from an inherited traditional IRA that had nondeductible contributions
2. You transferred an inherited plan account to a Roth IRA
3. You received a distribution from an inherited Roth IRA that was not a qualified distribution

then you'll have to download and print Form 8606, manually fill it out (instructions), and print and file your return, as you won't be able to e-file.

[end quote]

[fanfare]

"This is because an inherited IRA is not in the name of the taxpayer or spouse but must be kept in the name of the deceased."

Not much of an excuse. In fact this is no excuse at all.

The name and SSN of the beneficiary also is on the Inherited IRA.

[fanfare]

See this other thread on the same topic

https://ttlc.intuit.com/community/retirement/discussion/i-had-to-complete-form-8606-to-calculate-the...

[dmertz]

Neither the online version nor the CD/download version supports creating a Form 8606 for a distribution from an inherited IRA.

[fanfare]

My suggested solution combined with the dmertz solution both outlined in the other thread cited, addresses the problem in a reasonably satisfactory manner, allowing e-File.

That's just my opinion.