Form 8606

[phee19]

In years past I had to mail my return instead of efiling because Form 8606 was not generated for my inherited IRA that has basis. Last year, Form 8606 was correctly generated and I could efile. For this year(2024), Form 8606 is pulling a distribution from a different IRA (not inherited).that has no basis. How do I correct the distribution amount on this form? The carryforward basis for the inherited IRA is correct. I know that you cannot report IRA’s that are inherited and those that are not on the same Form 8606. 

[dmertz · Accepted solution]

TurboTax has never been able to produce a Form 8606 for a distribution from an inherited IRA.  That's true of all years of TurboTax, including 2023.

Because your 2023 tax return included Form 8606 that has this distribution from the inherited IRA on it, you filed an incorrect 2023 tax return, likely because you failed to indicate to TurboTax that this distribution was from an inherited IRA.  The Form 8606 that was produced was one that showed the distribution as coming from your own IRA instead of form an inherited IRA, so line 14 of that form shows basis that is claimed to be your own basis instead of basis in the inherited IRA.  Even though it won't change any of the amounts present on your original Form 1040, you should probably amend your 2023 tax return to show zeros on your Form 8606 originally filed and to include an identical From 8606 showing the name as the decedent, FBO you, as you have done in the past.

When preparing your 2024 tax return you'll need to tell TurboTax that you have no basis in nondeductible traditional IRA contributions so as to remove the erroneous date transferred in from your original 2023 tax file.