Greetings- I have a similar issue which I will describe below in as much detail as I can, but this is appears to be a GLITCH in Turbotax that needs to be fixed ASAP as it makes a huge difference in taxable income. I received one 1099-R which combines two separate transactions. Below are the details of the situation:
1099-R Details:
BOX 1 (Gross Distribution) of the 1099-R has $240,000; BOX 2a (Taxable Amount) has $120,000. Box 7 has only one Code- "G". The remainder of the 1099-R fields are either blank or unchecked, including Box 2b.
The Two Transactions Details:
A) Direct rollover Conversion of $120,000 to a Roth IRA (this shows as the taxable amount in BOX 2a); and
B) Direct rollover of $120,000 to a traditional IRA (this is non-taxable).
I enter everything as explained above in TurboTax; I then answer the follow-up questions which are designed to let the program know what I did with the money. THE GLITCH IS THAT THE QUESTIONS ARE NOT BROKEN DOWN BY THE TAX STATUS OF THE DIFFERENT PARTS OF THE GROSS DISTRIBUTION. SO YOU CAN ONLY ANSWER THESE QUESTIONS ONE WAY OR THE OTHER, WHICH LEADS TurboTax TO EITHER CONSIDER THE GROSS DISTRIBUTION IN BOX 1 AS TAXABLE OR AS NON-TAXABLE. THIS RESULTS IN EITHER ZERO TAX (CONTRARY TO THE $120,000 ENTERED IN BOX 2a, WHICH IN THIS CASE SEEMS TO GET TOTALLY IGNORED BY TurboTax); OR DOUBLE THE TAXABLE AMOUNT ENTERED IN BOX 2a (WHICH AGAIN IGNORES THE TAXABLE AMOUNT OF $120,000 ENETERED IN BOX 2a.)
The financial institution issuing the 1099-R is refusing to issue two 1099-R forms, one for each transaction. They say what they did is right and common practice, which after doing some research, I found to be true.
To TurboTax: I tried to include all relevant facts in detail so you can evaluate and fix the issue. Many thanks in advance for your understanding cooperation, as the filing deadline is fast approaching. Please note that in my case I was able to spot the error (OF ALWAYS IGNORING THE TAXABLE INCOME ENTERED IN Box 2a OF 1099-R) due to the large difference in the calculated tax ($68,000 vs $34,000). Other users of TurboTax may not be so lucky.
