!099 R, 1099B double tax when withdrawn?

[ewz12]

I received a 1099 B and 1099 R from an ESOP. Most of the money was rolled into an ira. With the 1099 R filled in, the taxes are zero. When I add in the 1099 B, they become huge. Won't that money be taxed again as I withdraw from the IRA?

[MarilynG1]

If you took a distribution of your ESOP stock and rolled it over, yes, you would have no tax liability, but yes, you will later when you withdraw funds.  You probably have a Code G in Box 7 of your 1099-R. 

The 1099-R may represent dividends or a cash distribution.

The 1099-B represents stock you sold.

Be sure that the Cost Basis on your 1099-B is correct; if not, check the box to indicate that you need to change it and enter the correct Cost Basis (which may be the amount in Box 2a of your 1099-R). 

If you took a distribution and sold shares immediately, your Cost Basis and Proceeds may be about equal amounts, so you are just reporting the transaction, and there would be little or no affect in your taxable income when entering the 1099-B with correct amounts.

Here's more info on Non-Qualified Stock Options. 

@ewz12 

[ewz12]

Thank you! That was really helpful. It does not have a G, it has a 1, but now I know to find the basis.