I had to complete form 8606 to calculate the nontaxable portion of an RMD from an inherited IRA. am I required to mail form 8606 to the IRS? Turbo tax does not provide it

[dmertz]

It wouldn't hurt to include with a mailed tax return either a manually prepared Form 8606, clearly marking the form as being for calculating the taxable amount of a distribution from an inherited traditional IRA, or provide the same calculation on a separate explanation statement.  Without some sort of supporting calculation, the IRS is likely to question why the distribution was not fully taxable.  Providing that information may head off an IRS query when an IRS examiner looks at your tax return after having been kicked out by the IRS Automated Underreporter Program, which seems likely to happen.

[love-the-irs]

following up on this issue - appears to be something Turbotax can't handle. They provided the following responses:

"The instructions for 8606 clearly state that an 8606 must be included if you take RMD from an inherited IRA."

and:

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.

I will no longer use Turbotax if they can not resolve this issue. Filing a paper return is no bueno.

[fanfare · Accepted solution]

Attach Form 8606 to your return if required.

If you failed to attach it, you need to file form 1040-X to attach it.

SO

E-file your return, don't file on paper.

After it is ACCEPTED, 

get Form 1040-X from IRS website and mail it in with your 8606.

Note: since you are not changing any amounts on your tax return, you can leave all the lines 1-23 EMPTY. 

The names on 8606 should be  "<owner> and <your name> BENE" or Beneficiary if it fits.

In a few months to a year, you will get an acknowledgement from the IRS.

[fanfare]

I'm assuming TurboTax includes the correct taxable amount in 1040 Line 4b, like my other tax software does.

[dmertz]

Good point regarding the instructions for Form 8606 saying that you must file the form under these circumstances.  Despite many requests for this capability over the years, it seems Intuit has made the corporate decision not to provide the capability for generate a Form 8606 for a distribution from an inherited IRA.

Although I believe that there is at least one competing tax program that supports the capability for generate a Form 8606 for a distribution from an inherited IRA, I'm not sure that the IRS e-file specification supports filing such a form, so it might be the case that you have to paper-file no matter what software you use.  Even the Form 8606 itself lacks instructions for identifying the form as applying to an inherited IRA, so you need to make a notation at the top of the form to indicate that, something that I suspect has no way to be included in an e-filing.

[dmertz]

Under these circumstances, TurboTax required the user to calculate the taxable and and enter enter the result in box 2a of TurboTax's 1099-R form instead of what is shown on the actual Form 1099-R.  TurboTax uses this value to determine the amount on Form 1040 line 4b.

[fanfare]

showing "<owner> and <your name> as Beneficiary" makes it a Form 8606 for an Inherited IRA.