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