I am going to be filing a tax return on behalf of my deceased parents. Both of them died in the same calendar year, and each had been taking RMDs from their individual IRAs for a number of years.

The sequence of events was like this:

1. Early in the year, before taking any RMDs, first taxpayer died. His traditional IRA was turned into a beneficiary IRA for his surviving spouse.

2. Later in the year, surviving spouse takes an RMD from her traditional IRA and also an RMD from the spousal beneficiary IRA [this second RMD was appropriately sized to match the amount that the deceased spouse needed to take].

3. Still later in the year, the surviving spouse dies.

I am confused about how to handle the form 8606 reporting on the final joint tax return. In the past, when both people were alive, each filed a form 8606 in their own name with their appropriate info on it.

Now, for the final joint tax return, do I still file two separate form 8606, but each in the name of the second spouse to die (the one that took the RMDs)?

Second question - each spouse had cost basis in their respective IRA that had been tracked over the years on previous form 8606. If two separate form 8606 filings are indeed required for the above situation, can the 8606 which is filed that tracks the
first-deceased person still use that cost basis that is associated with that IRA?

Thanks for any help you can give - RPD

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There is always a separate 8606 filed for any distributions from an inherited account, and its basis tracked separately. This would be so when the same one person takes distributions from their own and from an inherited IRA - they'd file two forms 8606
with their (one) tax return for the year.

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<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2011) - All rights reserved. >>
<< ------------------------------------------------------- >>

--- SoupGate-Win32 v1.05
* Origin: fsxNet Usenet Gateway (21:1/5)