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Tell Us the Value of Your Traditional IRA

Forum|Forum|2 years ago
March 7, 2024
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I have a traditional IRA, a Rollover IRA (rolled from a 401k), an inherited IRA, and a Roth IRA (all at Fidelity). In 2023, I took the RMD from the inherited IRA. I also did a Roth conversion from my Rollover IRA to my Roth. I understand those amounts are taxable. What I don't understand is why TurboTax is asking me this question. TurboTax says get the info from my 5498. But I got a 5498 for my inherited and Roth, I did not get one for my rollover or traditional. So I can't get the year-end value of my traditional from a 5498. BTW, I saw an answer here from 2021 that said if you did not make non-deductible contributions, you would not see this question, but I have told TurboTax that I did not make non-deductible contributions for all of these IRAs. I can figure out the year-end value of my traditional IRA, but the fact that it wants this number makes me think I made a mistake (or TurboTax has a bug).

Best answer by dmertz

If you made no excess traditional IRA contribution and made no distributions from a traditional IRA while having basis in nondeductible traditional IRA contributions, TurboTax has no need for this value to prepare your tax return.

TurboTax's guidance is often rather incomplete, as in this case, often leaving out important details that don't apply to the majority of filers. Unless the IRA was inherited from your spouse and you chose to treat it as your own, making it your own IRA, it's not to be included in the total value of your own IRAs when TurboTax asks for this value. If your participate from whom you inherited the IRA had basis in nondeductible traditional IRA contributions, you'll need to include the year-end value of that IRA on a separate Form 8606 prepared outside of TurboTax when determining the taxable amount of a distribution from the inherited IRA.

D

dmertz

Employee

"TurboTax says get the info from my 5498."

No it doesn't. You have to enter the amount. Enter only the total of the year end balances in your own traditional IRAs (rollover, SEP and SIMPLE IRAs are all traditional IRAs). do not include the amounts in any Roth IRAs or in any inherited IRAs maintained for you as beneficiary.

The IRA custodian was required to provide the year-end values for all of your IRAs in January on your year-end statements, so that's where you'll obtain the values for accounts for which they were not required to send you a Form 5498.

J

jhbrown42Author

Forgive me for paraphrasing. I'd correct what I said about the 5498, but I can't get back to that screen. No matter.
1) My main question is why TurboTax needs that number. I didn't think it would have any impact at all on my taxes, but maybe it does. If so, I'd like to know how. If not, I'd suggest that maybe the program be improved so I don't have to go look up numbers that are not going to be used. And I wouldn't have to wonder what IRA balances to include. To wit,

2) I found some in-program help for that line. It says "Enter the total value of ALL of your traditional IRAs, including SIMPLE IRAs, as of December 31, 2023." When you click on the hyperlink for "traditional IRAs", it says "A traditional IRA is any IRA that is not a Roth IRA or a SIMPLE IRA". So by my reading, that would include inherited IRAs (it's not an inherited Roth). Your answer says not to include inherited IRAs. Which is correct?

D

dmertzAnswer

Employee

If you made no excess traditional IRA contribution and made no distributions from a traditional IRA while having basis in nondeductible traditional IRA contributions, TurboTax has no need for this value to prepare your tax return.

TurboTax's guidance is often rather incomplete, as in this case, often leaving out important details that don't apply to the majority of filers. Unless the IRA was inherited from your spouse and you chose to treat it as your own, making it your own IRA, it's not to be included in the total value of your own IRAs when TurboTax asks for this value. If your participate from whom you inherited the IRA had basis in nondeductible traditional IRA contributions, you'll need to include the year-end value of that IRA on a separate Form 8606 prepared outside of TurboTax when determining the taxable amount of a distribution from the inherited IRA.