Question

IRA basis and Total value of Traditional IRA after inheriting an IRA

Forum|Forum|2 years ago
March 28, 2024
2 replies
0 views

My husband had a traditional IRA that has some nondeductible contributions. He also has an inherited IRA that we are assuming has no nondeductible contributions. For 2023 he had to take an RMD from the inherited IRA so that is a distribution. He also converted some of his own Traditional IRA to his Roth IRA.

When Turbotax asks for the basis it has not changed. Turbotax then asks for the total value of Traditional IRAs. Do I add the inherited Trad IRA value to the remaining total in my husbands Trad IRA? So the total increases while the basis stays the same.

J

JulieS

Yes, that is correct. When they ask for the total year end value of all traditional IRAs, inherited accounts are included too.

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D

dmertz

Employee

The answer provided by @JulieS is incorrect. Do not include the value of the inherited IRA maintained for your husband as beneficiary. Everything about inherited IRAs must be kept entirely separate from the individual's own IRAs.

Including the inherited IRA in the total value will result in an incorrect value on line 6 of Form 8606 and an incorrect calculation of the taxable amount of the distributions from your husband's own IRAs. Nothing about the inherited IRA is to be included on your husband's Form 8606.