@SLYKTAX wrote:
How about this question for my wife?
Continue on last question: My wife also contributed to her 2020 ROTH was also returned. $5,000 contribution was made in 2020 and $2000 was in 2/1/2021. Schwab said the earning for $5000 contribution is to be reported in 2020 Tax Return. It takes days for Schwab to respond to a question. Another guy I talked to didn't understand the split.
My question is : Assuming the total earing is $700. That means the Total Return Distribution with gain made this year is $7,700. I split the earing by proportioning. That is earning for 2020 & 2021 are $500 and $200 respectively.
Then in her substitute 2020 1099-R : Is Box 1, Gross distribution $7,700 or $5,500 or $5,700 ? As I believe Box 2 is $500 as $200 will be for 2021 Return. The Box 7 code is also PJ, correct? Please advise.
It depends if the contribution made in 2021 was *for* 2020 or for 2021. If for 2020 then they are both 2020 contributions taxable in 2020, but if the 2021 contribution was *for* 2021 and returned in 2021 then the 1099-R should have a code 8J and will be taxable in 2021 on your 2021 return next year.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
