Thanks for asking your question! I'm sorry to hear about your tax issue and I'm going to try my best to help you understand or resolve it.
Thank you for your question, and thanks for using JustAnswer.com. I am a little confused by your situation, first because you cannot roll an inherited IRA into your own IRA. You can only take a distribution from the inherited IRA.
The IRS States: If you inherit a traditional IRA from anyone other than your deceased spouse, you cannot treat the inherited IRA as your own. This means that you cannot make any contributions to the IRA. It also means you cannot roll over any amounts into or out of the inherited IRA. However, you can make a trustee-to-trustee transfer as long as the IRA into which amounts are being moved is set up and maintained in the name of the deceased IRA owner for the benefit of you as beneficiary.
Your inherited IRA is not tax free; you are taxed on the distributions from the inherited IRA unless it was a Roth IRA. The IRS further states "Like the original owner, you generally will not owe tax on the assets in the IRA until you receive distributions from it. You must begin receiving distributions from the IRA under the rules for distributions that apply to beneficiaries.
Form 8606 that you mention is used to report
Nondeductible contributions you made to traditional IRAs;
Distributions from traditional, SEP, or SIMPLE IRAs, if you have ever made nondeductible contributions to traditional IRAs;
Conversions from traditional, SEP, or SIMPLE IRAs to Roth IRAs; and
Distributions from Roth IRAs.
So, if you received a distribution from this IRA it's taxable. Form 8606 would be used if the distribution was from a Roth IRA.
If you are required to file form 8606 and you cannot efile because of this, you cannot efile and leave the information off your return and send it in separately. Everything must be filed together.
Please feel free to include any clarifications in this matter. It is my goal to make you a satisfied customer today. Please let me know if you need anything additional. Thanks again for using JustAnswer.com and have a great day.
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You should be aware that your question, as with most tax questions, can never really be answered completely...addressing all the permutations; that is because of the many assumptions that have to be made I have done my best to determine what I think you are asking and answering it in the most direct and understandable manner possible. If, however, after reviewing the questions, you have any uncertainties or further questions, please do not hesitate to ask.