Missed Filing Form 8606 for Distribution

[Msmarbi]

Neglected to filed form 8606 in 2021 when making a RMD distribution.  Do I need to refile or can I pickup basis from previous filing?  Already filed amended 2021 once for K3 information and still waiting for IRS to review.

[DanaB27 · Accepted solution]

If you took a distribution from your traditional IRA in 2021 then you will need to file Form 8606. You will need to amend the 2021 return once the first amended return has been processed.

You can start the amended return now to see what your new basis is on line 14 of the 2021 Form 8606. This will be entered on your 2022 tax return:

1. Click on "Search" on the top right and type “1099-R”  
2. Click on “Jump to 1099-R”
3. Click "Continue" and enter the information from your 1099-R
4. On the "Review your 1099-R info" screen click "Continue"
5. Answer "yes" to "Any nondeductible Contributions to your IRA?" if you had any nondeductible contributions in prior years.
6. Answer the questions about the basis from line 14 of your 2021 Form 8606 and the value of all traditional, SEP, and SIMPLE IRAs

[Msmarbi]

It took forever for the amended return to be processed.  Rather than amend 2021 “again” for form 8606 can I just go forward with the basis from 2020 when I file 2022?  The net effect is tax was a little too high in 2021.  Have held up filing final 2022 waiting for IRS to process amendment plus needed K3. 

[dmertz · Accepted solution]

"can I just go forward with the basis from 2020 when I file 2022"

No.  The fact that you filed an incorrect 2021 tax return does not affect the amount of basis that actually carries forward.  Even if you do not file an amended 2021 tax return to make the correction, you must prepare the 2021 Form 8606 to determine how much basis should have been applied to your 2021 distributions and to determine how much basis carries forward from 2021 to 2022.  You are not permitted to pick and choose which years to apply your basis.  Whatever amount of basis should have been applied on your 2021 tax return is simply lost if you fail to file the amendment to make the correction.