Roth Conversion 1099-R

Forum|Forum|2 years ago
October 13, 2023
2 replies
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Hi, I have a 1099-R that has $20,000 from a conversion I did from a traditional IRA to a Roth IRA and the codes shown are 2K. I thought this would be taxable, but when entering the information from all boxes into TurboTax it says that I don't owe any taxes on that amount that was converted. On my 1040 it shows $20,000 in box 4a, but then $0 in 4b and notes "ROLLOVER". Is this correct?

fanfare

Level 15

after entering 1099-R, did you press CONTINUE ?

That's important.

@dude1234

dude1234Author

Level 2

Yes of course. The $20,000 shows on my final 1040 in box 4a like I said. The 1099-R was entered correctly based on the box entries. I've re-entered it several times to make sure b/c I keep wondering why its showing $0 in box 4b of the 1040.

NCperson

Level 15

@dude1234 on the 1099-R form itself, what is in Box 1 and what is in Box 2?

what you enter from Box 2 of Form 1099-R should end up in Box 4b on Form 1040.

dmertz

Level 15

The payer might have prepared the Form 1099-R incorrectly. They were required to put the same amount in box 2a as is in box 1 because the taxable amount of a distribution from an IRA must be assumed by the payer to be the same as the gross amount. Any difference in the taxable amount would have to be determined on Form 8606 in your tax return where any basis in nondeductible traditional IRA contributions would be applied. (Since you say that this was a conversion from your traditional IRA, I assume that the IRA/SEP/SIMPLE box is marked on this form.)

Also, make sure that, when asked, you indicate that you did a combination of converting, rolling over and cashing out, then indicate the entire gross amount as the amount converted. Do not simply indicate that you rolled the distribution over since a rollover makes that portion of the distribution nontaxable.

Code K indicates that the conversion involved an asset that does not have a readily available Fair Market Value. If that's the case, the amount in box 1 would have to have been determined by obtaining an appraisal, otherwise the amount in box 1 is going to be incorrect.

dude1234Author

Level 2

Box 1 and box 2a have the same amount and the IRA/SEP/SIMPLE box is marked.

There was nowhere to indicate a “rollover” so that’s also where I was confused.

NCperson

Level 15

@dude1234 if you remove the code K what happens? I tested this in the Desktop software and with or without the "k" doesn't make a difference - the $20,000 displays as taxable on the tax return......