In 2021, I performed a reverse rollover from my Schwab traditional IRA to my employer's 401k plan at Fidelity. The source IRA had a basis of 12k from nontaxable contributions made in 2019 and 2020.
When the funds were received by Fidelity, they informed me that the non-taxable portion of the funds could not be accepted into the 401k plan. Instead, they split the 12k out and deposited them in a new Roth IRA.
Schwab issued a form 1099-R with code G for this rollover.
Fidelity provided a form 5498 showing the 12k as a rollover contribution to the new Roth IRA.
I'm now having difficulty getting TurboTax to emit a correct form 8606. The Easy Step flow doesn't seem to cover this scenario and complains that the 1099-R is miscoded if I indicate that a Roth conversion was involved. Going to the forms and editing the worksheet (the "Rollovers, Roth Conversions, Roth Rollovers, and Recharacterizations" section) for this 1099-R doesn't seem to update the 8606. When I perform overrides of form 8606, I get an error saying that this will prevent e-filing.
I contacted Schwab to ask about the coding for their 1099-R. As the source of funds, since it was a complete distribution for purposes of rollover, they claim their coding is correct. Should I try to get a 1099-R indicating a conversion from Fidelity? Or can I just submit with the overridden 8606 and perhaps add an explanation of this situation somewhere in the return?
