IRA BASIS

[GaryRSt]

Why, considering the following, was my IRA Basis reduced by Turbo Tax in 2020 by $4050, as shown in our 2020 tax forms on Part 1 line 3 of the IRA Information Work Sheet?

I paid no federal tax in 2020.  My total tax on line 24 of form 1040-SR was $0.

No form 8606 was generated by TurboTax.

I made a Qualified Charitable Contribution from my IRA of $4050.

The abbreviation STMT was added to line 4a of form 1040-SR.

 $4,050 – QCD appears in the section ADDITIONAL INFORMATION FROM YOUR 2020 FEDERAL TAX RETURN at the end of Schedule D form 1040, but not on line 4b of form 1040-SR.

I withdrew other funds from my IRA but returned them as a rollover in the appropriate amount of time.

    Line 4a of 1040-SR is the sum of the funds I replaced as a rollover to our IRA’s (3510.75 + 15033.46) plus the QCD (4050) I made from my IRA.

Line 4b of from 1040-SR is $0.

[Mike9241]

a QCD is a direct reduction of your IRA distribution so nothing shows up in 4b (only 4a) and you don't get a charitable deduction. "QCD"  should appear on 4b

if you have a tax basis in your IRAs the IRA distribution for the QCD will not reduce your tax basis. (won't show up on line 7 of form 8606) so if your entire IRA distributions were QCDs no 8606 will appear in your return.

rollovers would not show up on form 8606 but do show up on 4a but not 4b.

your 4a and 4b are correct. 

[GaryRSt]

Thanks for you input.  I do understand you response.

What I do not understand is:

Why did TurboTax show a reduction in my IRA basis for 2020  of $4050 (same amount as my QCD)  on Part 1 Line 3 of the 2020 IRA Information Work Sheet? That reduction carried forward to this years tax return.

[BillM223]

Please see the example for Jeff, a taxpayer making a QCD, on the left hand column on page 15 in Pub 590-B.

@GaryRSt

[GaryRSt]

Thank you for your response.

I understand from the example you provided how the excludable amount of a QCD can be reduced by IRA contributions, however that does not answer my question.

My question is why was my IRA basis reduced as indicated on The IRA Information Worksheet?  And, why was it reduced by the same amount ($4050) as the QCD I claimed in 2020.

Further, if my IRA basis was reduced why was no 8606 generated by TurboTax?

In 2020 I did the following:

    Took an IRA distribution of $15033.46 in April.

    Returned $15033.46 to my IRA in May

    Throughout the year made QCD’s totaling $4050