BASIS AND INHERITED IRA
I currently have an IRA which has a basis in it for the years I could not take a deduction. Now i have an inherited IRA from my mother and need to take a distribution from this inherited IRA.
My question is do I need to use the basis from my personal IRA and show it on the 8606 form?
Do I not report it on the 8606 form and just take it as all income? Thanks for your help.
Permalink Submitted by Alan - IRA critic on Mon, 2020-10-12 19:58
If the inherited IRA has no basis, it should be kept totally separate from your own IRA and Form 8606. If it did have basis, you would need to use a separate 8606 for the inherited IRA, and it turns out that produces a problem with some tax programs. But you will only need one 8606 with the figures on it excluding the inherited IRA.