Question

"Tell us the value of your traditional IRA" -- which accounts to include?

Forum|Forum|5 years ago
February 13, 2021
1 reply
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I need some clarification filling out the screen in TurboTax where is asks "Tell us the value of your traditional IRA." The description (and other posts I found on this site) all talk about "traditional" IRAs, SEPs IRAs and SIMPLE IRAs. My wife has a what Vanguard labels a "Rollover IRA": originally a traditional IRA but became a "Rollover IRA" when she left a job and had her 401(k) distribution rolled into it. Is a Rollover IRA included as part of this amount in TurboTax?

She also has an Inherited IRA. Same question -- is that included here in TurboTax in the total value of traditional IRAs? I would think both should be included, since for tax purposes, they are the same as a regular IRA, but it would be great to know if that is correct or not.

D

dmertz

Employee

Yes, the Rollover IRA is a type of traditional IRA and must be included in the year-end value of her traditional IRAs.

The inherited IRA is not be included. The inherited IRA is maintained for her as beneficiary, not as participant. Only IRAs (including SEP, SIMPLE and rollover IRAs) of which she is the participant are to to be included on her Form 8606.

If the inherited IRA has it's own separate basis in nondeductible traditional IRA contributions made by the decedent, the taxable and not taxable amounts of any distributions from the inherited IRA would need to be calculated on a separate Form 8606 outside of TurboTax, then TurboTax needs to be told the resulting taxable amount. TurboTax does not have the ability to prepare a Form 8606 for an inherited IRA. Everything about an IRA inherited by a non-spouse beneficiary must always be kept entirely separate from the beneficiary's own IRAs.