I received a 1099-R for a pension account that I rolled over to an IRA rollover account. No taxes were withheld. Only box 1 had a number. Box 7 had code G (direct IRA rollover). There were no TurboTax questions on this item about an IRA rollover. It just ask a question about rollover to a Roth IRA. When my gross income is calculated, it adds this amount to the total gross which is incorrect. It does not seem to indicate I owe taxes on the amount (does not change my taxes owed/refund). Is this OK?
Yes, it is okay. So what happens is this:
Once you enter the code G direct rollover, the program recognizes it as a rollover nontaxable event. The total amount of the rollover should be reported on your Form 1040 line 4a, as a nontaxable amount. Since this is a nontaxable amount, it shows zero amount or nothing on line 4b as the taxable number. You do not pay any taxes on it.
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A code G is automatically a rollover to a Traditional IRA unless yiu indicate that it was rolled into Roth. If you answer no to the two Roth questions then the default *is* a Traditional IRA so there is no need to ask any additional questions.