Inherited IRA with basis Form 8606 TaxAct

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Post Reply
letsgobobby
Posts: 10973
Joined: Fri Sep 18, 2009 1:10 am

Inherited IRA with basis Form 8606 TaxAct

Post by letsgobobby » Fri Jan 19, 2018 1:18 am

Have a small inherited non spousal IRA that had basis. When attempting to enter this info into TaxAct, I couldn’t see an option to enter basis, but found this online:

https://www.taxact.com/support/21070/20 ... -form-8606

Inherited traditional IRA distribution with basis and did not own traditional IRA distributions. If you took a distribution from a traditional IRA you inherited which had a basis, and had no distributions from IRAs which you own, figure the taxable amount of the inherited traditional IRA distribution using the Retirement Plan Distributions Worksheet after entering the distribution on Form 1099-R. File a paper return and include all copies of Forms 1099-R and 8606.


Is this requirement to file a paper return unique to TaxAct? Do I have to file the entire return by paper, meaning I cannot efile at all, or do I just submit an amendment (by paper) after the fact to my efiled return?

Spirit Rider
Posts: 7080
Joined: Fri Mar 02, 2007 2:39 pm

Re: Inherited IRA with basis Form 8606 TaxAct

Post by Spirit Rider » Fri Jan 19, 2018 11:14 am

The problem is that if you have basis in an inherited traditional IRA. The instructions require the writing of "Inherited IRA" on the top of the separate Form 8606 for the inherited IRA.

I do not know for sure, but it is very likely that there is no provision in the e-filing data package specifications to provide that information.

letsgobobby
Posts: 10973
Joined: Fri Sep 18, 2009 1:10 am

Re: Inherited IRA with basis Form 8606 TaxAct

Post by letsgobobby » Fri Jan 19, 2018 11:52 pm

Can I efile my tax return then do an amendment with the info about the inherited IRA with basis?

User avatar
Epsilon Delta
Posts: 7064
Joined: Thu Apr 28, 2011 7:00 pm

Re: Inherited IRA with basis Form 8606 TaxAct

Post by Epsilon Delta » Sat Jan 20, 2018 12:28 am

Can you? Probably.

Should you? Read the jurat you sign when you file:
Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and belief, they are true, correct, and accurately list all amounts and sources of income I received during the tax year.

Katietsu
Posts: 1113
Joined: Sun Sep 22, 2013 1:48 am

Re: Inherited IRA with basis Form 8606 TaxAct

Post by Katietsu » Sat Jan 20, 2018 12:40 am

If your concern is a quick refund, filing on paper in January does not usually slow the return down much. The exception is if the government shuts down. Haven't heard how that was going tonight.

kaneohe
Posts: 4593
Joined: Mon Sep 22, 2008 12:38 pm

Re: Inherited IRA with basis Form 8606 TaxAct

Post by kaneohe » Sat Jan 20, 2018 10:03 am

Does TaxAct allow you to override entries on the forms (which could be dangerous if not used properly). If so , could you calculate the taxable part of the distribution separately and then enter that in line 15b of the 1040. Be sure the total distribution is in 15a. Since there is a discrepancy between the 2 numbers, IRS generally wants you to put a note , e.g. rollover, QCD,etc. I don't know if TaxAct will let you do that.
If you could at least change the 15b number, that might allow you to e-file and then follow up w/ the 8606 amendment w/an explanation of why the 15a/b entries differ. This way all the 1040 numbers/tax/etc would be correct........just missing an explanation....and perhaps you could e-file.

Doing the paper tho seems more straightforward.

Post Reply