Received an inherited IRA distribution,paid the appropriate taxes on the distribution. Then rolled over the distribution into another IRA. Does the taxes paid come back?

Forum|Forum|5 years ago
April 16, 2021
2 replies
14 views

The IRA was a code 4.

ProSeries Professional

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Skylane

Intuit Community Champion

That doesn’t make a whole lot of sense. You should check the irs rules on an inherited IRA

If at first you don’t succeed…..find a workaround

qbteachmt

Level 15

"Does the taxes paid come back?"

The first issue is if you "rolled" this into your own IRA, or opened and titled one as Inherited.

The next issue is, you took a distribution, and when you "rolled" it, did that meet the Rollover Eligibility rules, which also were more lenient due to the CARES Act.

Then, when you "rolled" it, did you include the amount to make it whole? Your currently available funds would have been needed to supplement the amount, because the distribution was a Gross amount, and having withholding meant you got a Net. To Rollover in Full requires that you provided the missing amount.

If you did not rollover in full, then you have a Partial Rollover and a Partial Distribution. The amount that was withheld for taxes is no different than if you kept it, and that is the Distribution amount.

Lastly, the taxes paid in simply count towards all tax payments made by you through any combination of withholding and estimates. It will only "come back" if your entire tax year results in a refund condition.

ProSeries has a Help article for you:

https://proconnect.intuit.com/community/individual/help/proseries-form-1099-r-faq-s/00/4853

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BobKamman

Level 15

I thought inherited IRAs had to be trustee-to-trustee transfers, but then I thought this was a TurboTax user and you wouldn't get involved.

qbteachmt

Level 15

"but then I thought this was a TurboTax user and you wouldn't get involved."

I didn't want to assume, out of the box.

And, well, there's a reason I included a ProSeries Help article link, as in, if it gets a reply that someone is not using ProSeries, that would clarify things.

I didn't dive into all the rollover provisions for inherited IRA for 2020, because the CARES act changed so many things. For example, we don't even know if 2020 was the year of inheritance; if it was inherited from a spouse...

@BobKamman If you use the Reply, then your Macro function, you can post the TurboTax redirect.

As usual Details would be helpful.

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