Hi all, I'm new to ProConnect (previously used Thomson Reuters Ultra Tax). On that software we entered a basis for every type of retirement account I can think of. In ProConnect, I don't see a diagnostic that tells me I need to enter it. So this client has both pensions from government and IRA accounts (4 total, one of each for client and spouse). The wife has a IRA/SEP/SIMPLE 1099 (box checked) and the husband does not. Do I only need to enter the basis of the checked one? I read the instructions and did some research and am still confused. Thanks in advance!
scroll down to Where do I enter starting basis for Roth and traditional IRAs
From the Input Return tab, clickDeductionson the left-side menu.
From the Deductions submenu, selectAdjustments to Income.
Scroll down to theTraditional IRAsection and enter the appropriate information in the following:
Form 8606 (Part I)
Enter the taxpayer and spouse's basis in Traditional IRAs at the beginning of the current year in theForm 8606 (Part I)subsection underIRS basis for 20XX and earlier years. If nondeductible contributions are made in the current year, and distributions are also taken, the program prints this amount on line 1 of the IRS Pub 590 worksheet.
Form 8606 (Part III)
Enter the taxpayer or spouse basis in Roth IRA Conversions in theRoth IRA: Form 8606 (Part III) subsectionunderBasis in Roth IRA Conversions as of 12/31/20XX. If the taxpayer receives a Roth IRA distribution in the current year, the basis amount entered prints on Form 8606, page 2, line 24. If the taxpayer did not receive a Roth IRA distribution in the current year, page 2 will not be generated. The program, however, will retain the basis and proforma it to next year, increasing it by any additional Roth IRA conversions made in the current year. The program prints aRoth IRA Basis Schedulewith theWorksheets.
Enter the taxpayer and spouse's basis in Roth IRAs at the beginning of the current year in theRoth IRA: Form 8606 (Part III)subsection under Basis in Roth IRA Contributions as of 12/31/20YY. If the taxpayer receives a Roth IRA distribution in the current year, the basis amount entered prints on Form 8606, page 2, line 22. If the taxpayer did not receive a Roth IRA distribution in current year, page 2 will not be generated. The program, however, will retain the basis and proforma it to next year, increasing it by any additional Roth IRA contributions made in the current year. The program prints aRoth IRA Basis Schedulewith the worksheets.
Thank you. I understand the technical details but not what the IRS requires. This is more along the lines of the answer I'm looking for. I don't think they technically require the basis or otherwise we would get a critical diagnostic, correct?
A little trick with ProConnect is to view the form when you Check Return. If the box or line is shaded blue, you can click on that shaded area and it will take you to the input. (equivalent to right click & Jump to Input with Lacerte)
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