Special Trivia Question for 3/10/2026 (Pro Rata Rule)

Most IRA accounts are factored into the pro rata rule. Which are not (more than one answer may be correct)?

A. Rollover IRA
B. SIMPLE IRA
C. Roth IRA
D. SEP IRA
E. Inherited IRA

The instructions for Form 8606 make clear that IRA’s inherited from another taxpayer should not be commingled with the primary taxpayer’s IRA’s on Form 8606. If the inherited IRA’s have basis, they should have a separate form 8606.

The instructions also make clear that line 6 should only include amounts in Traditional (not Roth) IRA’s. This makes sense, because the assets in Roth IRA’s have been taxed already, and none of the money already in a Roth IRA should be taxed as a result of a separate conversion.