IRA Distribution with a basis

Forum|Forum|5 years ago
March 4, 2021
6 replies
18 views

I have submitted a tax return twice and it has been rejected both times. error-FED_Taxable _inherite. Says a potential issue with calculation. This distribution is not an inherited IRA. However it does have a basis of which I have completed 8606. I have went over it many times to see if I had checked an inherited box. I can't find anything. Any suggestions or help would be greatly appreciated. I have done this client's tax for many years with the basis and never had an issue. Thanks.

ProSeries Professional

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Best answer by dkh

https://proconnect.intuit.com/community/proseries-tax-discussions/discussion/return-rejected-due-to-taxable-inherited-ira/00/135317

dkhAnswer

Level 15

https://proconnect.intuit.com/community/proseries-tax-discussions/discussion/return-rejected-due-to-taxable-inherited-ira/00/135317

C

CLASSYAuthor

Level 3

Thanks. I saw this after I posted question.

F

Frustrated-in-IL

Level 8

There is a problem with calculation of the taxable portion of an IRA when there is also an inherited IRA. Specifically, the program is including the amount of the inherited IRA distribution on line 7 of Form 8606. This is causing a larger than allowed basis recovery. Apparently, ProSeries is holding returns that include Form 8606 until this is fixed. All my returns with Form 8606 got this rejection and I had no idea until I actually worked on one with an inherited IRA. It looked funny to me and I compared it with last year and immediately saw the problem.

C

CLASSYAuthor

Level 3

Thank you.

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