Retirement tax questions

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@DC51 wrote:

My issue is slightly different: When I requested funds from my IRA, broker transferred funds to my checking account. I then requested broker to return funds to IRA, and then transfer to my Roth.  In addition I have regular monthly amounts coming out of IRA going directly to a lender to pay down a mortgage.  The 1099-R issued by broker included the funds transferred to my checking, which subsequently went back to original IRA. Thus the 1099-R was overstated by that exact amount. If I import the overstated 1099-R into turbotax, what do I need to do to reduce it by the double-counting? The 5498's I received show the funds going back to account as a contribution, and the other shows it as a conversion to Roth. So 5498's are correct. Turbo tax says "delete the original 1099-R, and create 2 new ones.  Can't I keep the overstated one, and then create the 2 new ones?

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You have two different thing going on here that cannot be entered into TurboTax with a single 1099-R.

The 1099-R you have is correct because it reports the total of the first distribution that was put back, the amount converted to a Roth and the amount withdrawn to pay pay the mortgage.    As long as your entries equal the 1009-R is should be fine.

First delegate anything that you have entered and start over.

Make both 1099-R entries into TurboTax exactally the same - same payer information, box 7 code, box 2b checked, IRA box checked,  checked, but different box 1 and 2a amounts.

For the amount converted to the Roth.    On one 1099-R screen, enter the amount converted in box 1 and box 2a.   Answer the followup question that you moved the money and then did a combination of things.    Enter the amount converted in the lower box (convert box).   And continue to the screen to add another 1099-R.

For the 2nd 1099-R, In box 1 and 2a enter the REMAINDER of the total distribution form the 1099-R that you received (that will include the overstated amount) into box 1  and 2a.   Again say you did a combination for things,  in the top (rollover) box enter the total amount that was first put back.   Leave the bottom box blank.  (The difference between the box 1 amount and the amount used for the mortgage).

Finish the interview.   If done correctly the resulting 1040 form line 4 should show the original 1090-R box 1 amount on line 4a and the amount converted to the Roth plus the amount that paid the mortgage on line 4b (the taxable amount).

[Also was any tax withheld in box 4 for either the first transfer of funds or the 2nd Roth conversion and distribution?  If it was and not made up with other funds the that box 4 amount must also be allocated between both dummy 1099-Rs according to how it was withheld (for one only or for both).   Any tax withheld and not paid with other funds will add to the 1040 line 4b taxable amount and reduce the amount converted to the Roth or rolled back.]