Situation:
$29,449 basis from previous Roth 401(k) rolled over to new Roth IRA in 2018
Subsequent $25,000 early (non qualified) distribution from Roth IRA in 2019
1099-R :
- Box 1 (Gross distribution) = $25,000
- Box 2a (Taxable amt) = $0
- Box 2b (Taxable amt not determined) = Checked
- Box 7 code = J (early distribution from Roth IRA)
Am I right in assuming that - having not satisfied the five-year rule - even though we've taken less than the previous total basis, there is still a 10% penalty we owe? And just the 10% penalty and not also ordinary income tax?
I'm having trouble determining whether I'm getting (or how to get) the right data entered into TurboTax. I've answered the following questions:
"Owned any Roth IRA for Five Years?"
-No
"Were any Roth IRAs open?" (on 12/31/2019)
-Yes
"Withdraw from Roth IRA before 2019?"
-No
Then, the following question...
"Enter prior year Roth IRA contributions"
Is this where I enter the former Roth 401(k) basis ($29,449)? If I do, the result is there are no taxes assessed.
If I enter 0, it looks like full taxes (at least ordinary income tax, possibly also 10% penalty?) are calculated on the full $25,000 distribution.
I've spent way too much time searching for answers! So I'm finally adding my own question to the forum. Thanks in advance!
