dmertz
Level 15

Retirement tax questions

Codes B and G together indicate that this was indeed a distribution from a Roth 401(k) that was only permitted to be deposited into another Roth 401(k).  Depositing it into a traditional IRA made it a failed rollover and an excess contribution to the traditional IRA that, as I mentioned previously, needed to be corrected by a return of contribution, not a regular distribution, from the traditional IRA, then deposited into the Roth IRA as a rollover, not as a conversion.

 

If both the code-BG and code-2 Forms 1099-R were 2021 Forms 1099-R, as a return of contribution the code-2 Form 1099-R would instead have code 8 (along with code 1 if you were under age 59½).  Without precise details it's difficult to describe the true legal nature of the transactions, but if due to investment gains the amount moved from the traditional IRA to the Roth IRA was more than the amount deposited into the traditional IRA, the difference should be in box 2a of the code 8 Form 1099-R and that amount was not eligible for deposit into the Roth IRA as part of the rollover (and depositing that into the Roth IRA would be an excess contribution to the Roth IRA).  Ultimately it's a real mess to sort out the compounding of the several sequential errors.

 

A substitute Form 1099-R (Form 4852) is one that you would prepare as a substitute for the erroneous code-2 Form 1099-R provided by Fidelity.  The most difficult part is preparing the explanation statement that is part of that substitute form.