I read everything on the web and found two solutions...assuming no change in the 1099R form which showed G (rollover).
1. Modify the 1099R form so it shows distribution into ROTH and TT will calculate the tax. My questions are: is this OK by IRS? How about the gain it has made (almost 50%!)? Will it exceed the contributions limit and impose a penalty till I withdraw?
2. Recharacterize the whole sum + any capital gain back into a traditional IRA. I tried that and TT said I have excess IRA contribution and will impose a 6% penalty till I withdraw.
3. Withdraw the contribution and gain into cash from ROTH and pay tax this year. I'm over 65 and should be OK. But how about the 5 years no withdrawal rule?
Any suggestion?
