Acceptable documentation for IRS Form 8606
What documentation, if any, will the IRS likely require now if a single Form 8606 was filed in 1989 for TY1988 documenting traditional IRA (tIRA) basis (non-deductible contribution); no additional 8606’s were ever filed; but distributions began for TY2024 without a TY2024 8606 form filed?
Have been assisting my parents with income tax preparation using FreeTaxUSA for a few years. This concerns their TY2025 return. Married filing jointly. Father deceased in 2025. Mother still alive. Father took first tIRA distribution, not an RMD for TY2024. Mother took first tIRA distribution, an RMD for TY2024. Both >59 ½. Spousal rollover of father’s tIRA to mother in TY2025 after his passing. No form 8606 was included for TY2024, as I was not aware there was a basis for my father’s IRA. This year (2026) I found a single 8606 for my father for TY1988; an unsigned duplicate 8606 printed out by the paid income tax return preparer for my parents’ records in 1989. Unfortunately, also found handwritten notes indicating other non-deductible tIRA contributions for both parents’ IRA’s in TY’s prior to 2000, but unable to substantiate with any formal IRA contribution records. There are no 5498's, other 8606's, or IRA statements for TY's prior to 2000. The suspected tIRA’s custodian for time period of suspected non-deductible contributions has no records going back more than 7-years. There is no documentation of these other non-deductible contributions; except hand-written notes and duplicate printouts of fed tax returns showing no deduction taken. TY2000 to present has sufficient documentation for me to confidently conclude no additional non-deductible contributions were made after TY1999. No distributions except non-taxable transfers to new tIRA accounts occurred till the taxable distributions for TY2024. There have been many transfers of entire balance to new tIRA’s since the 1980’s, though. Starting with the first distributions TY2024, 1099-R’s for distributions from these tIRA’s do not reflect any basis; with Box 1 same as Box 2a; and Box 2b checked (Taxable amount not determined).
Though it only seems to decrease federal and state tax liability ~$9 for TY2025 if only the basis shown on the single 8606 is used, I would still like to begin reducing the taxable amount of their distributions starting TY2025.
Is the safest way of pursuing this the following?
>Do not amend TY2024 1040.
>Ignore all suspected non-deductible contributions except that indicated by the duplicate printing TY1988 IRS Form 8606 for my father.
>Mail a TY2024 8606 to the IRS for my father. This TY2024 8606 would bring the TY1988 basis forward, and adjust it for his distribution for TY2024. If so, should I also include a copy of the TY1988 8606 that was printed out for my parent’s records in 1989? It is just an unsigned 2nd printing for my parent's records. Should I include the TY1988 1040; also an unsigned, 2nd printing? What about TY2024 1040? Include short, concise note explaining situation? Should I mention the basis was transferred to the spouse via the IRA spousal rollover in TY2025?
>Use my father’s TY2024 8606 information to generate a TY2025 8606 for my mother in FreeTaxUSA for efiling this year (TY2025) and all future years FreeTaxUSA is used. Even though it appears FreeTaxUSA is not designed for this, I know how to answer the interview questions so as to generate a 8606 with all data in all forms correct. I already tried and previewed all forms. Then, this TY2025 8606 data will hopefully be pulled forward by FreeTaxUSA in subsequent years if…..
>Will my mother be able to continue using her and her deceased spouse's FreeTaxUSA account in future years? He is listed first on the return.