Is Inherited IRA Included Pro Rata For Roth Conversion Taxes?
I have an existing Inherited IRA and am considering doing a backdoor Roth by funding a separate non-deductible IRA and then converting only the non-deductible IRA to a Roth. I have no other existing IRA’s besides the Inherited IRA.
My Question: Is the Inherited IRA required to be included in the pro rata calculation in order to do the Roth Conversion?
Thanks for your help,
Mike
Permalink Submitted by Alan - IRA critic on Fri, 2020-12-11 19:00
The inherited IRA is NOT included on the Form 8606 reporting any distributions or conversions from your owned IRA accounts. Therefore, the inherited account does not affect your back door Roth plans in any way. If your inherited IRA happened to include basis from non deductible contributions, you would use a separate 8606 to report RMDs and distribution from the inherited IRA. You would indicate “Inherited IRA” on that form and use a different 8606 to report your back door Roth conversions.