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form 8606 include value of inherited IRA?

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    form 8606 include value of inherited IRA?

    My client has nondeductible basis in his IRA and takes distributions from it. He also has an inherited IRA from a parent. So for line 6 for value of all IRA's do I include the value of the inherited IRA as well?
    The instructions doesn't indicate anything. I am thinking you do include it. Anyone know? Thanks

    #2
    I believe the inherited IRA needs a separate 8606. If he is also taking distributions from the inherited IRA then his basis in the inherited IRA is the same as the decedents.

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      #3
      Originally posted by nwtaxlady View Post
      My client has nondeductible basis in his IRA and takes distributions from it. He also has an inherited IRA from a parent. So for line 6 for value of all IRA's do I include the value of the inherited IRA as well?
      The instructions doesn't indicate anything. I am thinking you do include it. Anyone know? Thanks
      Since IRA's inherited from parents remain under their name with TP listed as beneficiary, I wouldn't think they would need to be included in the calculation.

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        #4
        Originally posted by nwtaxlady View Post
        My client has nondeductible basis in his IRA and takes distributions from it. He also has an inherited IRA from a parent. So for line 6 for value of all IRA's do I include the value of the inherited IRA as well?
        The instructions doesn't indicate anything. I am thinking you do include it. Anyone know? Thanks
        See TTB 13-23 top of page

        also see TTB 13-22 titled Inherited IRA choices. A designated beneficiary has several choices when inheriting an IRA.
        Always cite your source for support to defend your opinion

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          #5
          Originally posted by Dude View Post
          I believe the inherited IRA needs a separate 8606. If he is also taking distributions from the inherited IRA then his basis in the inherited IRA is the same as the decedents.
          Client doesn't have any basis in the inherited IRA as the decedent didn't have any basis in it. So my question is, do I include the FMV of the inherited IRA with all the other IRA's he has? He takes distributions from all. Or leave the inherited one out and just treat it like a normal IRA with no basis? OR do I have to factor it in with all the others?

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            #6
            Since you have to separate the RMD's on each, I would think you would not combine the values in calculating the non-taxable portion of his IRA. Can not find anything to back that up though.

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