@impuesto88 wrote:
One more question on 1099-R then, does the 7000 in 1099-R (the one with distribution code 2 in particular, see green below) go into anywhere in 8606 at all?
I assume not based on your answer "There is no tax or penalty on the before-tax earnings since the earning were simply switched into the recharacterized account." But now I'm seeing the 8606 generated by turbotax has 7000 in line 16, and 1000 (taxable amount) in line 18.
【 As the result of the above steps, I received 2 1099-R forms
- the one for Roth IRA account has distribution code N, box 2a = 0, box 1 = 7000
- the one for trad IRA has distribution code 2, box 1=box 2a=$7000, and the IRA/SEP/SIMPLE box checked 】
That is correct. The earnings are taxable.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
