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If I have an inherited IRA and my own traditional IRA with…

If I have an...

If I have an inherited IRA and my own traditional IRA with non-deductible contributions in it (i.e. basis), and then take a distribution from my traditional IRA, is the FMV of the inherited IRA included on line 6 of Form 8606 when calculating the taxable portion of the distribution?

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Answered in 3 hours by:
3/14/2018
Dr. Fiona Chen
Dr. Fiona Chen, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 1,180
Experience: Former IRS Revenue Agent
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I'm Fiona, former IRS revenue agent. I am looking at your question and will get back to you soon. Fiona Chen, MPA, Ph.D., CPA, ABV, CFF, CITP,IMTA

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Dear Customer,

Yes. The total IRA should include the inherited IRA according to instruction of Form 8606. There is no rule or regulation provided for us not to include the inherited IRA. For example, it is understandable that if the deceased had basis in that IRA account, the heir could have also inherited that characteristic of basis. Therefore, in the total traditional IRA should include the inherited IRA.

Please feel free to follow up.

Regards,

Fiona

Dr. Fiona Chen
Dr. Fiona Chen, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 1,180
Experience: Former IRS Revenue Agent
Verified
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