I received a 1099-R coded 1 but I believe it should have been coded 1M. I had a 401k loan in 2019 in good standing when I left the company. Because plan rules prevented me from making repayments, the loan defaulted and converted to a distribution. I am now ready to rollover the full balance into an IRA but would feel more comfortable if the 1099-R was corrected.
When I contacted Fidelity and explained the situation (including walking the representative through the 1099-R instructions and pointing out the specific paragraph on page 8 which explained my circumstance), they did a review (took 5 business days ) and today I got the answer that they would not be issuing a correction. I contacted the IRS after the fidelity news and they stated that I can submit a 1099 complaint form on 2/15/20 but I'm not sure if that is the best course of action. Right now I am trying to work with my previous employer to have them petition Fidelity to correct the 1099-R.
The questions I have are:
1. Turbotax software doesn't go in-depth and ask about code M when filling out the 1099-R, it simply asks if I have rolled that money into an IRA. Is this the correct way of filing this transaction?
2. If Fidelity still refuses to change the 1099-R, would a 1099 complaint filed with the IRS help this situation.
3. I do not want to miss the deadline for rolling the money into an IRA, should I continue with the rollover and get the proper 5498 with boxes 13a checked and 13c coded PO or should I wait until the 1099-R is corrected?
Any help with this would be greatly appreciated.
