@rk777 wrote:
Does this also apply if you receive a lump- sum pension distribution, and a portion of it is after- tax employee contributions, reported all in one 1099-R? The pretax goes to Traditional IRA, the after tax went to a Roth IRA? Seems like a significant oversight in the instructions (or was the 1099-R prepared incorrectly by the financial inst?). Ignoring the after-tax portion correctly characterized everything as non- taxable - but does that create a problem with properly tracking the after tax funds into the Roth IRA, for the future? Thx.
Yes.
TurboTax does not directly support a single 1099-R going to two different destinations.
If box 7 is code G and the after-tax money is in box 5 then do it this way.
What you must do is split the 1099-R into two 1099-Rs.
For the amount rolled to the Traditional IRA.
1) In box 1 use the original 1099-R box 1 minus the box 5 amount.
2) Box 2a = 0.
3) Box 5 = blank.
4) Box 7 = G.
5) Answer NO to the two interview questions that ask about a Roth - the default is a Traditional IRA.
For the amount rolled to the Roth IRA.
1) In box 1 enter the original box 5 amount.
2) Box 2a - 0.
3) Box 5 = original box 5 amount.
4) Box 7 = G.
5) Answer NO to the first interview question about a 401(k) Roth and YES to the rollover to a Roth IRA.
That should properly report the 1099-R. The box totals of the two 1099-R should equal the amounts on the original 1099-R.
Nothing about splitting into two 1099-R's go on a tax return - the IRS only gets the dollar amounts on the 1040 form.
**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.**
