TT calc non-deductible ira on F8606 for last 2 yrs, but no amt in either F1040 lines 15b or 32. Thus was taxed on full amt of RMD. What do I do to correct errors?

[NSYC]

have used TT for 10 yrs & started my RMD in 2014.  TT prep F8606 with correct info from prior yrs, but did not xfer amt from F8606 line13 to F1040 line32 or report any adjusted amt on line 15b. Same for 2015, except an additional problem in F8606 calc due to missing 2015 yr end total IRA amt.  Hence when I start work on 2016 tax, I have zero non-deductible IRA carried forward.  Do I have to amend 2014 & 2015 tax returns, or can I simply start in 2016 with my beginning non-deductible amt?  If TT is not filling in lines 15b and 32 on F1040, can I type the amt in?

[macuser_22 · Accepted solution]

Line 32 is an IRA deduction for a new IRA contribution and has nothing to do with a RMD (new Traditional IRA contributions are prohibited after age 70 1/2).

If you failed to enter the total value of all Traditional IRA accounts in the 2015 tax return interview then it was assumed that the value was zero so all of the basis was used to improperly lower the taxable amount in your 2015 tax return which was not allowed if there was still any Traditional IRA on existence. 

Now you show no carryover basis because it was used in 2015.

You must amend 2015 and properly enter the 2015 year end total of all existing Traditional IRA accounts so that a new 2015 8606 is created and probably pay additional 2015 tax on the RMD that was not taxed properly.

Then use the new 2015 8606 line 14 basis as the prior years non-deductible basis when entering the 2016 1099-R and then enter the total 2016 year end value of all IRA's

[NSYC]

Thank you for clarifying the purpose of F1040 line 32.  For those reading this answer, I also want to correct the statement in  my original question that there was not an adjusted amount in F1040 line 15b.  That is not true.  I double checked and it had the adjusted amount.  Thanks again for speedy answer.