Ask Terry Questions basis in traditional ira and no-basis inherited ira

basis in traditional ira and no-basis inherited ira

By Terry Savage on January 17, 2024 | Financial Planning / Retirement

I am inheriting an ira with no basis where the decedent already started taking rmd’s. I am a sibling within 10 years of decedent’s age at passing. I have my own traditional ira with basis due to non-deductible contributions over the years. When I file my income tax return, how do I calculate the rmd calculations properly? Does my basis still only count against my traditional ira balance or can I apply basis amount to entire combined balance of these two accounts. Thank you.

Terry Says

These accounts must be kept separate — and you’ll follow the rules for distributions from the inherited IRA, where the decedent had already started taking RMDs.
Your own IRA distributions will be calculated separately, based on your age. And as noted, since you made after-tax contributions to a traditional IRA, the calculations will be a bit more complicated. As your plan custodian.



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