My name is on the 1099R. Box 7 is a 7. I was my husband’s sole beneficiary and chose to treat his traditional IRA as my own after his death on 02/24/2020 by designating myself as the account owner. Here is the exact quote from the IRS:
[Quote]
From IRS Pub. 590b:
What if You Inherit an IRA?
If you inherit a traditional IRA, you are called a beneficiary. A beneficiary can be any person or entity the owner choo- ses to receive the benefits of the IRA after he or she dies. Beneficiaries of a traditional IRA must include in their gross income any taxable distributions they receive.
Inherited from spouse. If you inherit a traditional IRA from your spouse, you generally have the following three choices. You can:
1. Treat it as your own IRA by designating yourself as the account owner; [end quote]
This morning I decided to go back and look at our 2019 returns. When I efiled our returns for 2019, TT kept rejecting them because I was still listed on the returns as “spouse”. TT said I had to switch positions and be the “taxpayer” for 2019 even though my husband did not die until 02/24/20. Once I switched, our returns were accepted.
To my horror, this morning when I began to review the 1099Rs on the 2019 returns, I saw that because of switching my name at the beginning of the returns to “taxpayer”, automatically TT switched our names on our 1099Rs. No one warned me about that and it was my first time filing our returns.....my husband always did them on TT each year. Does this mean I have to amend our 2019 returns even though the total amounts do not change? On my hard copy of the 2019 return, all the IRS sees is my name and my husband’s name at the top of each page of the returns. The 1099Rs are not listed showing names so I don’t see how it would matter to the IRS that my internal worksheets have the names switched on 1099R.
I think what I have is an internal TT problem in that when I loaded the new software for 2020, it auto filled our personal information from 2019 as is normal BUT since my name mistakenly appears on my husband’s IRA 1099R in the year when he was alive all year, is that somehow causing TT to refuse to tax my 1099R cash distributions for 2020? It still makes no sense why TT accepted the Roth Conversion and taxed it properly but refuses to tax the cash distribution especially since there is no basis on any IRA. It was taxable in 2019 and is also in 2020.
