I received two 1099-R forms for a rollover from a traditional 401k to a Roth IRA. When I enter both forms, TurboTax is reporting that both distributed amounts are taxable. The 1099 from the company managing the 401k lists the distributed amount, but box 2a (Taxable Amount) is blank. 2b is not checked and box 7 has a code of G. The 1099 for the Roth IRA account lists the same amount for box 1 and 2a. Box 2b is checked for both taxable amount not determined and total distribution and box 7 has code 2. IRA/SEP/SIMPLE is also checked. I confirmed that on the 1040, both lines 15b and 15c are populated. I do not understand why TurboTax is calculating both amounts as taxable income.
When converting an old 401(k), keep in mind:
- If you are required to take a required minimum distribution (RMD) in the year you convert to an IRA, you must do so before converting to a Roth IRA.
- You'll owe taxes on the amount of pretax assets you roll over.
- Note that if you have assets in a Designated Roth Account (i.e., Roth 401k) and would like to roll these to an IRA, you can only roll these assets over into a Roth IRA.