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NETom
Level 2

Inherited IRA with Distribution and Subsequent Rollover Prior to August 31 2020 - Improper TurboTax Treatment

I have seen much discussion on this topic but so far I have not seen a proper solution.  

I received an RMD payment (at the time) from an Inherited IRA.  Subsequently the CARES Act was passed eliminating the RMD requirement for IRA's (including Inherited IRA's per the "Caution" Note on Page 9 of IRS Form 590-B).  I rolled this over into the same account prior to August 31.  I received a 1099-R for this and the rollover contribution was noted on Form 5498.  With an inherited IRA, rollovers are not normally allowed but 2020 is an exceptional year in many aspects and rollovers are allowed as below.  TTax does not allow us to access the rollover question set for a 2020 Inherited IRA distribution.  The solution offered by this Community is to state that this is not an inherited IRA which then allows access to the rollover question set (what did you do with this money?).  However, that answer is not true and TTax should function properly, in my opinion.  TTax needs to allow - for 2020 only - the Rollover question set for inherited IRA's.  Again, please see Page 9 Caution wording in 590-B specifically pertaining to Inherited IRA Beneficiaries.  Wording pasted below:

 

"You can never make a rollover contribution of an
RMD; however, RMDs are waived for 2020 and
you can roll over an RMD for 2020. The rollover
must be completed within 60 days after the distribution,
except that for distributions made before July 2, 2020, the
60-day rollover period was extended to August 31, 2020.
Normally, any rollover contribution of an RMD is subject to
the 6% tax on excess contributions. See chapter 1 of Pub.
590-A for more information on the tax on excess contributions."

5 Replies
fanfare
Level 15

Inherited IRA with Distribution and Subsequent Rollover Prior to August 31 2020 - Improper TurboTax Treatment

[removed by me]

fanfare
Level 15

Inherited IRA with Distribution and Subsequent Rollover Prior to August 31 2020 - Improper TurboTax Treatment

Removing my answer since basically there is an issue here.

fanfare
Level 15

Inherited IRA with Distribution and Subsequent Rollover Prior to August 31 2020 - Improper TurboTax Treatment

Although you enter code "4",

If you do not check the "I inherited this IRA" box.

It looks to me that  it does work

NETom
Level 2

Inherited IRA with Distribution and Subsequent Rollover Prior to August 31 2020 - Improper TurboTax Treatment

Not sure if this supersedes your earlier answers or was your earlier answer which you were deleting.  My issue is that I am forced to give the wrong answer to make this work but yes, by giving the wrong answer it will ultimately work, I think.  Somehow that just seems unsatisfactory to me, particularly with something like tax code.

Thank you.

fanfare
Level 15

Inherited IRA with Distribution and Subsequent Rollover Prior to August 31 2020 - Improper TurboTax Treatment

TurboTax has many, many issues that need to be worked around.

TurboTax Online calculates my taxable amount wrong,  so I can't use it to e-File.

TurboTax Online does not allow overrides.

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