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Beneficiary IRA and Non Deductible IRA

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    Beneficiary IRA and Non Deductible IRA

    My client has a large beneficiary IRA and an IRA he set up mostly with non deductible contributions. When he turns 70.5 and starts to take his RMD from the Traditional IRA, will the amount in the beneficiary IRA be added to the FMV of his Traditional IRA on Form 8606?

    #2
    Inherited IRA

    Originally posted by Kram BergGold View Post
    My client has a large beneficiary IRA and an IRA he set up mostly with non deductible contributions. When he turns 70.5 and starts to take his RMD from the Traditional IRA, will the amount in the beneficiary IRA be added to the FMV of his Traditional IRA on Form 8606?
    If your talking about an inherited IRA, special rules may apply (spouse/non spouse especially with timing.

    See if the attached 8 points helps your issue

    One wrong decision can lead to expensive consequences for an inherited IRA, and good luck trying to persuade the IRS to give you a do-over. Here are seven tips for managing your account.
    Always cite your source for support to defend your opinion

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      #3
      Both are traditional

      Just following the Form 8606 and also consulting the TaxBook, it appears that all traditional IRAs are to be lumped together for calculating the non-taxable percentage to be exempted.

      I believe the beneficiary IRA and the "non-deductible" IRA are both traditional, absent any information to the contrary. Just because one of them was funded with non-deductible contributions doesn't create a category other than traditional. One thing that would not enter the calculation would be a Roth.

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