Form 8606 and non-deductible contribution tracking
I have filed an annual form 8606 to track nondeductible contributions to my traditional IRA. This year, I inherited an IRA with a basis and as a non-spouse beneficiary, took RMD distributions.
Do I add the inherited IRA data to my form 8606, compute the non-taxable portion of my distribution on the basis of all of my traditional IRA assets? Or do I submit two forms 8606 – one for my own contributions, and one for my inherited IRA? And if so, do I compute the taxable portion for inherited IRA based solely on the balance in the inherited IRA, or on the basis of all of my IRA balances?
Permalink Submitted by Alan - IRA critic on Tue, 2014-02-18 04:19
With basis in both your own IRA and your inherited IRA, you will have to maintain two different totally separate 8606 forms which will treat the basis for each type of IRA separately. You should determine a way to label each form to identify which IRA type it applies to in years where you must file an 8606 for each type.