IRS FORM 8606
I was told I can’t efile with two 8606 forms, both in my name. I have my own 8606 basis & this year inherited a Traditional IRA from which I took a RMD for 2021. Pub 590 says I can’t co-mingle the inherited basis with mine. I have converted all my Trad IRA into ROTHs in 2021 so I will no longer have a basis after 2021. The Trad accounts all had a zero balance for 12-31-21. Does this mean I will have to mail in my return or is there software out there that will allow me to generate 2 forms 8606 in my name? Should I just claim the inherited RMD in 2021 and start the inherited 8606 next year? Problem is, then I wouldn’t have a zero balance on all my traditional accts if I had to include my inherited one. Any suggestions would be appreciated!
Permalink Submitted by Alan - IRA critic on Tue, 2022-02-22 20:57
How much additional taxable income do you have if you file the 8606 for your own IRA, and just report the inherited IRA distribution as fully taxable? What is your % of basis in the inherited IRA, are you under the 10 year rule, or was the inherited IRA RMD the uncompleted RMD of decedent?
Permalink Submitted by David Mertz on Tue, 2022-02-22 21:21
From this person’s other post here, the inherited IRA was established by rollover from the federal TSP account of a decedent dying in 2021, so this is subject to annual RMDs based on life-expectancy, not the 10-year rule. The 2021 RMD was paid from the TSP before rolling over the remainder in 2021.