Morgan Stanley messed up and sent a RMD distribution from my Inherited IRA that didn't have to be made in 2020 ($21K).
In an attempt to correct it for last year's taxes, I was instructed to send the $21K back to them, and deposit it back into the Inherited IRA account it came from. It was received/posted by them to the account on 1/28/2021 but - bottom line - could not be applied to fix the 2020 error. I ate the tax impact for 2020.
Since contributions cannot be made to Inherited IRAs, the $21K was refunded to me on 3/4/2021, thereby zeroing out the 2021 chaos of trying to fix their error.
I received the correct $18K RMD distribution from the account in October 2021.
Unfortunately, I've now received TWO 1099Rs on this Inherited IRA account. One for the correct amount ($18K), and another for $21K.
The $21K 1099R has amounts in both box 1 and 2A, along with codes 8 and 4 in Box 7. IRA box is checked.
When I enter it into Turbo Tax, it's handled as if it was a normal distribution, despite the explanation that it was a refund of a non-allowed contribution. My taxes jumped significantly!
I'm trying (unsuccessfully so far) to get them to understand this $21K 1099R is incorrect, as the only distribution I actually received was $18K.
Am I missing something? How should this problem be corrected? If I don't enter the amount in Box 2A, everything seems OK, but that will not match up with the copy the IRS receives.
Suggestions?
