IRA Basis Incorrectly Reduces Basis

[sballard]

Turbotax reduced the amount of a QCD from an IRA year-end basis value. How can the basis be corrected?

[dmertz]

If you enter a Form 1099-R and in the online version mark the checkbox on the Do any of these situations apply to you page to indicate that you made a QCD or in the CD/download version answer Yes to the question that asks if you had any or the distribution transferred to charity, TurboTax will exclude from Form 8606 whatever amount that you indicate was a QCD and the QCD amount will not change your basis in nondeductible traditional IRA contributions.

[sballard]

Thank you for the reply. I am using a downloaded version.

The questionnaire allowed the distribution to be noted as a QCD. 

The system has not produced a Form 8606.

Nonetheless, the IRA Worksheet reduces the carryover basis into 2023 by the amount of the QCD.

[dmertz]

Have you clicked the Continue button on the page that lists the Forms 1099-R that you have entered and entered your year-end value in traditional IRAs (or entered it directly on line 18 of the IRA Information Worksheet)?  It appears that TurboTax limits your carryover basis to an amount no greater than your year-end value in traditional IRAs, although I don't think that that limitation is appropriate and is a bug in TurboTax.  I reported this bug (and a related bug involving HFDs) more than 5 years ago and have not seen any evidence that this bug has been addressed.

[sballard]

Thank you again.

Based on your guidance, I want through the steps to re-establish the basis (most toggles and amounts were already checked). However, the interview asked for the total value of IRAs as of 12/31 from Form 5498. Since those forms won't be available for months, I used statement values on 12/31/23. 

After entering the figures, I rechecked the IRA Information Worksheet and the carryover basis is now correct.