Code G does not necessarily mean a nontaxable distribution. Whether or not a code-G distribution is taxable depends on the type of account, traditional or Roth, that received the direct rollover. The taxable amount will be shown in box 2. However, if a direct rollover to another traditional retirement account was initiate but the funds were diverted to a non-retirement account and the rollover never completed, the code-G From 1099-R would not reflect the failed rollover and the result would be a taxable distribution .
