topic Inherited Roth IRA Question in Retirement tax questions

Inherited Roth IRA Question

GotTaxQs45 — Thu, 04 Mar 2021 03:43:18 GMT

I have an inherited Roth IRA (decedent died prior to 2018, decedent's account was open for longer than 5 years). I also have my own Roth, from which I've never taken a distribution (btw, I'd have to pay a penalty if I did, as I'm not of retirement age).

I take RMD's from the inherited account every year (no federal tax withheld or due) so I'm accustomed to how TurboTax walks you through adding the 1099-R.

However, this year, after I input the 1099-R from the inherited account, it starts asking me about MY Roth account (contributions, etc). I think it's confused and it's trying to subtract the distributions of the inherited account from the contributions of my personal account. When I look at the forms, it's putting my prior contributions for MY Roth into line 23 of the IRA Information Worksheet, and then the distribution from the inherited account appears on line 38 of the IRA Information Worksheet, with the difference appearing on line 51 of the IRA Information Worksheet. But really these two things aren't related (the inherited Roth distributions have nothing to do with the basis of my personal Roth), and in prior years TurboTax knew this.

1. Is this just a new error maybe from some missed update for the SECURES Act? Or is there something I'm missing? Or some flag I can hit so TurboTax EasyStep doesn't lead me down this rabbit hole after I input my 1099-R?

2. The IRA Information Worksheet isn't sent with my return, correct? So even if these erroneous numbers on lines 38 and 51 stay in this worksheet, it won't cause me issues with the IRS?

Re: Inherited Roth IRA Question

macuser_22 — Thu, 04 Mar 2021 04:00:39 GMT

Does it also show up on a 8606 form line7?

Re: Inherited Roth IRA Question

GotTaxQs45 — Thu, 04 Mar 2021 04:32:11 GMT

No, as of yet, TurboTax has not generated a Form 8606 based on that information - when I search for that form it's still blank.

Re: Inherited Roth IRA Question

macuser_22 — Thu, 04 Mar 2021 04:45:00 GMT

Line 38 is for rollovers. Did you roll it over?

Re: Inherited Roth IRA Question

GotTaxQs45 — Thu, 04 Mar 2021 05:06:01 GMT

No, I did not roll it over. It's an RMD distribution from the inherited Roth (cashed out).

Re: Inherited Roth IRA Question

macuser_22 — Thu, 04 Mar 2021 05:14:51 GMT

Then I so no reason for what you see. I can only suggest deleting both 1099-R's and re-enter to see if it persists.

Re: Inherited Roth IRA Question

dmertz — Thu, 04 Mar 2021 14:50:10 GMT

If you are using the CD/download version of TurboTax, make sure that you install today's (3/4/2020) update to TurboTax. This release (R20) implement several changes related to inherited IRAs, some of which were related to inherited Roth IRAs.

Re: Inherited Roth IRA Question

GotTaxQs45 — Thu, 04 Mar 2021 18:52:12 GMT

Thank you @dmertz , that seems to have solved the flawed questioning path...

Re: Inherited Roth IRA Question

macuser_22 — Thu, 04 Mar 2021 19:12:24 GMT

@dmertz wrote:

If you are using the CD/download version of TurboTax, make sure that you install today's (3/4/2020) update to TurboTax. This release (R20) implement several changes related to inherited IRAs, some of which were related to inherited Roth IRAs.

Looks like they fixed the inherited 8606 bug.