New Inherited IRA

[DaxPagan]

My husband's sister died and had an IRA.  He is the recipient (in 2025) of the Inherited IRA.  When TurboTax Desktop 2025 asks "Did [HE] Contribute To a Traditional IRA?", what's the right answer? I think the right answer is "no", because it was a rollover, not a new contribution. Is this correct?

[MaryK4 · Accepted solution]

No is the correct answer because it is not a contribution.

[fanfare]

Rollover from Inherited to your Traditional is not allowed.

If that's what you did, you need to contact the custodian to remove any amount above your allowed contribution limit for the year.

@DaxPagan 

[DaxPagan]

Thanks for your reply.  No, that's not what happened.  I may have used the wrong words.

His sister died.  She had an IRA.  He received it as an "Inherited IRA" that was new to him.  

[fanfare]

The amount he received is a "distribution"

the distribution code is "4"

it is taxable income.

@DaxPagan 

[DaxPagan]

There was no distribution.

[DianeW777]

There is nothing to do for 2025 since no distribution was taken. If there were ever any non-deductible contributions you need to find the amount from the financial agent.  You could also try to review her previously filed tax returns looking for a Form 8606.

 Here are the rules for a non-spouse beneficiary:

Non-spouse beneficiary options Review the link for additional details about required distribution

In 2020 and later, options for a beneficiary who is not the spouse of the deceased account owner depend on whether they are an "eligible designated beneficiary." An eligible designated beneficiary is

• Spouse or minor child of the deceased account holder
• Disabled or chronically ill individual
• Individual who is not more than 10 years younger than the IRA owner or plan participant

An eligible designated beneficiary may

• Take distributions over the longer of their own life expectancy and the employee's remaining life expectancy, or
• Follow the 10-year rule (if the account owner died before that owner's required beginning date)

Designated beneficiary (not an eligible designated beneficiary)

• Follow the 10-year rule

@DaxPagan