Roth conversion tax calculation
When converting a non-deductible IRA to a Roth IRA, does the value of an inherited IRA figure in the pro rata tax calculation?
When converting a non-deductible IRA to a Roth IRA, does the value of an inherited IRA figure in the pro rata tax calculation?
Permalink Submitted by Alan Spross on Fri, 2010-04-09 18:31
No. Any basis you have in your owned traditional IRAs is never combined with any basis you may have in an inherited IRA. You can only convert an owned TIRA, but the total value and any basis from Form 8606 for owned IRAs on Form 8606 does not include either the value of or the amount of any non deductible contributions in the inherited IRA.
If you do have basis in an inherited IRA, you would use a different 8606 to report distributions from that account, and again those 8606 forms are never combined with the 8606 numbers from other inherited IRAs (unless inherited from the same decedent) or your owned traditional IRAs.