Does inherited traditional IRA share basis with my prior non-deductible IRA contributions (form 8606)?

[Gordon3]

In the past, TurboTax was tracking my non-deductible contributions to a traditional IRA using form 8606. I had to go back to 2017 to find the most recent version of form 8606 in one of my returns. That appears to be the last time I made a non-deductible contribution to a traditional IRA. I thought TurboTax would keep track of those non-deductible contributions, but I no longer see form 8606 in my return. How can I find out if the TurboTax software is tracking my prior non-deductible contributions to traditional IRAs?

I took a Required Minimum Distribution (RMD) in December 2021 from a traditional IRA that I inherited after the prior owner’s death in mid-2019. Should all of that RMD from the inherited IRA be taxable income? Or should the non-deductible contributions to my own IRA accounts offset some of the taxable amount?  Does it matter if more than the required minimum amount was distributed from the IRA? Note: There is no tax deferred basis that came with the inherited IRA.

The only other distributions I have on 1099-R forms from 2021 relate to roll overs. I am more than a decade from taking RMDs from IRA accounts to which I have previously contributed.

[dmertz · Accepted solution]

Everything about the inherited IRA is separate from your own IRAs.

TurboTax track your own basis in nondeductible traditional IRA contributions on its IRA Information Worksheet.  You can look there to see if TurboTax has carried over your basis from your 2017 Form 8606 line 14.  Note that you can inadvertently cause TurboTax to silently delete your basis if you mistakenly ever answer No when TurboTax asks if you made nondeductible contributions to your traditional IRAs.

Since the decedent had no basis in nondeductible traditional IRA contributions, the entire distribution that you took from the inherited IRA is taxable.  Your own basis does not apply to distributions from the inherited IRA.

[Gordon3]

Thank you @dmertz.

That helps a lot, and I appreciate the tax expertise. I also appreciate the tip to look for the worksheet. It is indeed in my 2021 return, and I can see it when I look at the forms.

IRA Information Worksheed - 2021