We changed investment institutions in August 2021. We encountered difficulty with Inst #1 transferring (rollover IRA funds) to Inst #2 and had to take the total funds by check to close the account. Funds were deposited with Inst #2 within 2 days to complete the rollover. I have to take an RMD from this IRA. Institution #1 distributed the RMD and withheld appropriate taxes for it prior to the funds being distributed. The balance of the IRA was distributed to me via check, which was deposited with Inst #2 to complete the rollover. At year-end, Inst#1 issued a 1099-R showing the total IRA amount (IRA balance + RMD amount) as a gross, taxable distribution. It shows the taxes withheld for the RMD amount, and distribution code 7, IRA/SEP/Simple box checked. Should Inst #1 have issued separate 1099-R's for the IRA balance and the RMD? I asked them the same question and they declined to make those changes, telling me that "it's all the same money". I realize that Inst #1 could not document the rollover because they did not do the transfer to Inst #2. How do I properly report this to the IRS on my tax return? Will TurboTax address this situation in the course of filling out my return?
Thanks, Rick
