I am 68, retired with no regular income and have both a traditional IRA and Roth IRA. My financial adviser recommended converting a portion of my traditional IRA to my Roth IRA since my tax bracket is modest. In November 2019, I converted $90K from my IRA to my Roth IRA. My subsequent brokerage statement reflects a conversion and not a distribution. However, Merrill-Lynch generated a 1099-R which reflects a 'distribution' vs. a conversion. A M-L representative indicated that they will send a Form 5948 with the IRS in May, 2020 to support the conversion element of the transaction.
While performing the input to Turbo Tax for my 2019 returns, the software is telling me that I was not eligible for the $90K 'contribution and that a 6% penalty will be charged annually until the excess component is reversed/returned to the traditional IRA account. I paid $22K to the IRS and $11K to CA Franchise Tax Board for withholding related to the $90K conversion. Backing out a portion of the 'conversion' reduces the amount of Roth account accordingly plus I take a hard loss to sell securities at a now reduced price due to Corona virus related market volatility.
What is the Turbo Tax work around to 'remove' the penalty element and possibly maintain the $90K rise in my Roth IRA account? Does Intuit provide a CPA to walk me through the steps to complete and file my 2019 tax returns?
