TurboTax: 8606-T not working for 2023 like it did for 2022

[cmh66]

I have a traditional IRA with a non-deductible basis, but did not make a non-deductible contribution in 2023.  I also have an inherited IRA with taxable RMD and 1099-R for 2023.  Form 8606-T line 6 sums across all IRAs in order to adjust how much of the RMD is not taxable and then to adjust the remaining non-deductible basis.

Things worked as expected for 2022, but not for 2023.  First I can't get 8606-T to be added to the 2023 return without a non-deductible contribution (IRA Contribution Worksheet, line 1), but that worked last year.  I can get 8606-T to be added when I say there was $1 of non-deductible contributions in 2023, but even then I can't get it to bring over the value for 8606-T line 6 (IRA Information Worksheet, part IV, line 18) and do the calculations.  Also, I can't get it to fill in 8606-T line 7 from the 1099-R.

Suggestions?

[dmertz · Accepted solution]

Nothing has changed with regard to TurboTax generating Form 8606.  If your tax return includes no transaction required to be reported on Form 8606, TurboTax properly excludes Form 8606 from your tax return.  Your last filed Form 8606 is still current with resect to reporting your basis in nondeductible traditional IRA contributions that carries forward.

A distribution from the inherited IRA is not reported on the Form 8606 within TurboTax.  If the a distribution from an inherited IRA is appearing on that form, edit the entry of this Form 1099-R and be sure to answer Yes when asked if you inherited the distribution from XXX.

[cmh66]

Thanks for the information.  Seems like I will have to investigate more as to why TurboTax 2022 put the 1099-R RMD on form 8606-T.

[DawnC]

You may want to delete the 1099-R and reenter it, making sure to indicate it was inherited.  

[dmertz]

"Seems like I will have to investigate more as to why TurboTax 2022 put the 1099-R RMD on form 8606-T."

Unfortunately, TurboTax does not rely in the code 4 to indicate that the distribution is from an inherited IRA and instead requires you to confirm that the account is an inherited account by answering Yes when asked the poorly worded question, "Did you inherit the IRA from [financial institution]."  It's a mystery why TurboTax doesn't just believe the code 4.  TurboTax asking this question for a distribution from a traditional IRA just creates the potential for user error and provides no benefit.