Hi VolvoGirl,
It is really nice of you to put in all this effort to help people. Unfortunately I think you have been misinformed by David's post that you referenced. Please try this example to see what I am talking about. It is very simple.
Assume you have a 1099r with $300,000 in box 1. The value results from a $50,000 RMD distribution against a $50k RMD requirement, plus a $250,000 rollover to a different traditional IRA.
Make sure the birth date is set so the RMD questions are triggered. Then enter the 1099r data and anwser $50k for the two RMD questions, stating that the remainder is rolled over into another traditional IRA. In this case only $50k will be taxed as income.
Now do the same thing, but put in the box 1 value of $300k for the two RMD numbers. This time you will not get the question "what did you do with the rest of the money", because there is none left. In this case all $300k is taxed as income.
Using box 1 for the RMD results in a huge erroneous tax bill.
The solution does eliminate any RMD penalty, but the end result is a much bigger error for this situation.
I just did this myself and I am certain this is what happens. Please let me know if I am missing something.
Thank you for your patience.
