1099-R for stock

[napinkel]

In 2015, I transfered shares from my ESPP to my TD Ameritrade account, where I had a Roth IRA account.  Then Charles Schwabb took over.  I sold the stock in 2023.  I received a 1099-R but no 1099-B. The stock was sold at a loss.  The distribution is not causing any tax liability since I contributed more to the Roth than the distribution over the years.  But the distribution was a stock sale and then withdrawal, not a withdrawal of Roth IRA contributions. What do I do? Enter the 1099-R as well as the stock sale information (I have all cost basis details)?

[fanfare]

when you sell stock in a Roth to prepare for a distribution of cash, or for any other reason,

the sale is not reported anywhere.

enter the 1099-R.

@napinkel 

[napinkel]

But I then withdrew the funds, so I need to recognize the loss on the sale. The stock was not or should not have been a part of my Roth IRA, just transferred to TDA. I was able to fill out all the proper info without the 1099-B within turbo tax and no errors identified, but just want to double check as this is my first stock sale. 

[fanfare]

maybe you should have raised the issue with TD at the time the improper deposit was made.

It's too late now.

The error is in your favor

[napinkel]

I am planning to contact TDA next week as well as Charles Schwabb. After reading further into this, you cannot transfer stock directly into an Roth IRA, so the mistake seems to be on how Schwabb handled it as they didn't look into the transfer done before their assumption of the account. 

Explain how the error is on my favor? The stock loss would be beneficial on my taxes this year. 

[fanfare]

Generally it would be in your favor since you got tax free treatment,

Too bad about losses,

there is no such thing as gains or losses on Roth activity.

Since it was an error in transferring accounts,

maybe Schwab can unwind their action and send you a 1099-B for a transaction in a regular account.

They probably don't know your Date Acquired and cost basis.

@napinkel 

[Mike9241]

Prior to 2018 you could Qualify for a Tax Deduction on Schedule A:

• Only in very rare situations can you deduct losses in your Roth IRA account.
• To qualify for the deduction, you must close all of your Roth IRA accounts, including those with profits.
• Your traditional IRAs need not be closed, as they are treated separately.
• The value of your Roth IRA from the previous year or at any point during the time the account was open does not matter

For tax years after 2017, the deduction described is no longer available.

https://www.investopedia.com/articles/retirement/05/012505.asp#:~:text=If%20the%20loss%20occurred%20...