1099-R received for Inheritance. Any special treatment?

[lrcook15]

I do see a box where it shows "7" and then add the "4" BUT I do not see a place where it shows "I inherited this"

[PattiF]

Click Continue at the bottom right side of the page, and you will see "I inherited this" on the next page.

@lrcook15

[lrcook15]

I am in the Deluxe edition and it does not ask this???

[PattiF]

Are you using TurboTax Download or TurboTax Online?

[lrcook15]

PC Download

[PattiF]

Let me get the Download information to you. Most people use Online.

[lrcook15]

You are so helpful.

Thanks!

[PattiF]

Here are the screenshots from TurboTax Desktop:

This will be entered without a penalty. Thanks for your patience.

[lrcook15]

WOW!

It took over 50% of it out in taxes. Would this be correct?

[PattiF]

This would still be taxed as ordinary income. That could be correct depending on your total income. 

If you look at the 1040 in forms view, are there any taxes on Line 16 associated with any forms (besides the one on the top line that isn't associated with a Form)?

[lrcook15]

No other taxes on line 16.

[PattiF]

Is there a tax on Line 8 of Schedule 2?

[PattiF]

If there is a tax on line 8 of Schedule 2, then an answer needs to be changed.

Enter that all of the RMD was received. If they ask for an amount, you could enter 5% of the amount.

[GoNoles]

Hi - I'm almost done with my taxes, but when I get to Federal Review in the TT program, it asks me to put a value into Box 2a Taxable Amount, but the 1099-R form does not have a value in the actual form. Box 2b Taxable Amount No Determined is checked.  The program will not let me move forward without putting a value in and if I put in a (0) zero as TT suggests it changes the amount to not taxable, which is not correct. What do I put in there?

[DaveF1006]

It depends on how you answer the follow up questions in the interview. Since this is an inherited IRA:

1. Is the distribution code in Box 7 a code 4?
2. After you enter the 1099R, there is a series of follow up questions inquiring about the nature of the inherited IRA.
3. There will be questions about whether or not if the decedent was your spouse or someone else. It also asks for the date of death and the decedent's first name.
4. Then it will ask if the decedent had non-deductible contributions.  The answer to this will determine the taxable amount of this distribution. If you are not aware of any non-deductible contributions, then you will say that the decedent did not have non-deductible contributions.
5. Next question will ask if the decedent was born before xx/xx/1949 or after xx/xx/1949.  This is important because if he/she was born before, then an RMD distribution must be made. 
6. After all the questions have been answered and the entry is finished, Turbo Tax will determine the taxability of the income.  More than likely, it will be fully taxable unless there were non-deductible contributions that were made prior to the decedent's death. 
7. if all the conditions I have mentioned have been met above, if Turbo Tax keeps displaying this error message, assume the entire amount is taxable and put the same amount for Box 1 and Box 2A.