I am entering the distribution of an inherited IRA on Form 1099-R (Distribution Code 4), but it is interacting with my client's Form 8606 for his Traditional IRA with basis. ProSeries is saying that the distribution is nontaxable.
I spent 50 minutes on hold with tech support who only told me that she is not versed in the tax law. Can a developer help me or update the software to fix this bug?
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In my case what I've done is taken the basis out of the IRA info worksheet, made a note in another spot, and will add it back after the return is filed.
In my case there are no other distributions, and they do have basis from Non-Deducted IRA contributions.
Not a permanent fix though, just temporary to get the return filed.
I make my notes on the status page under permanent so I have them next year. I also make a pdf of the Preparer copy, post filing and acceptance, so I have all the input values on all sheets and all notes.
Document, document, document
Not a pretty solution, add code 8 in addition to code 4. The distribution will be excluded, however Code 8 is associated with Return of Contribution taxable in current year.
That triggers an explanation statement.
It would be sad to say software error requires this so tax is calculated correctly.
I did try overriding on 8606, however cells/lines 7, 9, 10, 12, are calculated elsewhere - what I mean is if you override line 7, the variable, then line 9 should adjust because it should include line 7. It is instead pulling numbers from somewhere else. Ok, so I overrode line 9. Line 10 calculates ok. Line 12, Should use the ratio and line 7, but instead it is using the incorrect value that would otherwise appear on line 7.
Kudos, Proconnect seems to work correctly if you have all Ts crossed and Is dotted. It comes at a higher cost.
I don't like though how controlling Intuit is, and if you give them client information, they have it forever!