AmyC,
After I manually created a 1099-R showing the gross distribution (and its earnings separately broken out), TurboTax shows a tax on those earnings. However, TurboTax is not creating a Form 5329 and is not erasing the IRA deduction.
In the 1099-R I first tried codes 1 and 8. Then in a revised 1099-R I replaced code 8 with code P. In both versions of the 1099-R (1/8 and 1/P) I got the same result: no 5329 Form and no erasure of the IRA deduction.
FYI. Later under deductions TurboTax asked if I want to make the IRA contribution nondeductible. I checked the No box, because I thought that TurboTax would erase the contribution as a result of the 1099-R.
How can I fix this?
