Form 8606 in year of death
Hello. Scenario: A spouse inherits a traditional IRA, elects to be the owner by combining it with their own IRA, calculates the RMD separately as required in the year of death, and takes both distributions at the end of the year from the combined account. How should the required IRS Form(s) 8606 be filed for the year of death – separately or combined amounts for the surviving spouse?
Permalink Submitted by Alan - IRA critic on Tue, 2020-07-14 17:32
Since no distribution was apparently taken from the decedent’s IRA before passing, any basis inherited by the surviving spouse is combined with any basis the surviving spouse already has, and the 8606 of the surviving spouse will use the combined year end values and combined basis of both spouses to determine the taxable amount. This scenario would be more complex had the deceased spouse taken a distribution before passing or if the surviving spouse took a beneficiary distribution from the inherited IRA account.