I take it that you took your distribution "in kind" - stock - and that stock had some amount of NUA (Net Unrealized Appreciation). You then immediately sold the stock. If that's correct then:
Typically
the 1099-R in this situation will have 3 boxes filled in: Box 1, Box 2a
and Box 6 which is the difference between Box 1 and Box 2a. You get
taxed on the Box 2a amount and that's the basis of the stock.
Then you report the sale of the stock off the 1099-B. The proceeds should be very close to the 1099-R Box 1 amount, the Box 2 amount is your basis and you have a gain more or less equal to the NUA. Be sure to indicate the sale is "long term".
So you're not double taxed. You're taxed at ordinary rates on the "basis" portion, you're taxed on your LTCG for the NUA, and together those two numbers come back -"more or less" - to the 1099-R distribution.
Tom Young
