Clarifying 8606/Inheritance Issue

Submitted by Cheryl Van Beek on Wed, 2017-03-29 00:37

Just to confirm, both RMDs to the beneficiary from inherited Traditional Non spouse IRA received in 2016 can go on one 8606 with 2016 return even though they are on two different 1099 Rs because one is Decedent’s Year of Death from 2015 (custodian took from decedent’s account before all was transferred to new inherited IRA) and the other is the beneficiary’s 2016 RMD taken from new inherited account?

When taking an RMD from an inherited IRA, the beneficiary only needs to file an 8606 for IRAs for which there is a basis is that correct?

If more than one 8606 is required but return is being prepared manually (no tax programs) no explanation is necessary?

Thank you.



Submitted by Alan - IRA critic on Wed, 2017-03-29 01:53

  • Yes, the distributions can be added together and reported on Form 8606 that includes only the inherited IRA. The 1099R Bpx 1 total will show up on line 15a of Form 1040 and the taxable amount as calculated on Form 8606 on 15b.
  • For an inherited TIRA, Form 8606 only applies to distributions from accounts for which a basis was inherited from the decedent’s IRA.
  • If a paper return is being filed, you can list on the top of each 8606 the accounts to which they apply. You can show the name of the decedent and account number shown on the 1099R that reports the distributions.


Submitted by William Tuttle on Wed, 2017-03-29 16:35

Be aware that some tax software can handle and generate an “Inherited IRA” form 8606 and some can’t. Also, even with the ones that do, it can be a little tricky to understand their questions correctly to generate the proper Form 8606(s). Remember that you have two seperate year-end balances and two seperate baisis totals for all Inherited IRAs and/or all non-Inherited IRAs. Make sure you understand what the Form 8606(s) should look like and double check the actual forms generated by the tax software. It should place a “Inherited IRA” label at the top of the correct Form 8606. Alan’s last suggestion makes a lot of sense.



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