1099-r an inherited IRA that was rolled over to another IRA

[lohde]

Turbo tax says that you follow these directions (bottom of this) but I never get asked the following 2 questions:

1. What did you do with the money from (bank)? 
2. Did you rollover all of this (Box 1) to another retirement account? 

However, I can get around the IRA being taxed by entering:

Yes, I had nondeductible IRA contributions

and enter 0 for the Calculated taxable amount

Is this correct?

Where do I enter an IRA rollover?

You should get a Form 1099-R from your IRA custodian which reports the rollover. To enter the information, follow these steps:

1. Search for 1099-R and select the Jump to link in the search results.
2. Continue through the screens to import or enter your 1099-R form.
3. When asked What did you do with the money from (bank)? select I rolled over some or all of it to an IRA or other retirement account within the time limits (normally 60 days) and Continue.
4. On the next screen, Did you rollover all of this (Box 1) to another retirement account? answer Yes, I rolled over to an IRA or other retirement account (or returned it to the same account) and Continue.

[ColeenD3]

From whom did you inherit it? Please see this answer from MargaretL.

NOTE:  The tax treatment of an inherited IRA depends on whether it was inherited from a spouse or a non-spouse.

1.  Inherited from a spouse.

If you inherited a traditional IRA from your spouse, there are three choices:

1. You can treat it as your Own IRA by designating yourself as the account owner.

2. Treat is as your own by rolling it over into your IRA, or to the extent it is taxable to a qualified employer plan.

3. Treat yourself as a beneficiary rather than treating the IRA as your own. 

You will be considered to have chosen to treat the IRA as your own if you made contributions to the inherited IRA (your above the line deduction) or you do not take the RMD -required minimum distribution for a year as a beneficiary of the IRA.

2.  Inherited from a non-spouse.

If you inherited the IRA form a non-spouse, you cannot treat it as your own.  It means you cannot make any contribution, you cannot rollover any amounts into or out of the IRA, other than trustee-to-trustee transfer as long as the IRA into which amounts are being moved is set up and maintained in the name of the deceased IRA owner for the benefit of you as beneficiary.  You also must begin receiving distributions from the IRA under the rules for distributions that apply to beneficiaries.

[lohde]

Yes it's the 2nd (inherited from a non-spouse) and it was treated as a trustee-to-trustee transfer into an IRA.  I'm just wondering why turbo tax doesn't ask if I rolled it over into another IRA.  None of it should be taxable as it was handled correctly.

[DawnC]

What codes are in box 7?   It has to have a code that indicates a trustee-to-trustee transfer to generate the rollover question in TurboTax since you cannot roll over any amounts into or out of the IRA, other than a trustee-to-trustee transfer.  And as stated above, the IRA into which amounts are being moved is set up and maintained in the name of the deceased IRA owner for the benefit of you as beneficiary.   

[lohde]

The code in box 7 is 4.

[ColeenD3]

Code 4 is not a trustee to trustee transfer. It merely indicates death. Since you did not inherit from a spouse, it doesn't qualify for rollover.

[mctugie]

I have a slightly different question.

I have a problem with taxes on some of the inheritance from my Mom. She had 3 annuities as part of her IRA. These annuities were paying out to her. When she passed, the remaining value of the annuities was divided between my sister and myself and we received checks addressed to us from the companies.

My mom's financial advisor  had us send him the checks and he deposited the checks into our decedent IRAs.

However, I received 1099-R forms for these annuities  with code 4 in Box 7. When I enter this into Turbotax, it looks like these proceeds are taxable and there is no way to state that they were rolled into the decedent IRA.

My financial advisor says this it a legal transfer and I will get a 5498 form from them in May showing that the proceeds of the annuities were deposited into my decedent IRA.

how do I do this with Turbotax?

Michelle

[MarilynG1]

As @ColleenD3 stated:

"Code 4 is not a trustee to trustee transfer. It merely indicates death. Since you did not inherit from a spouse, it doesn't qualify for rollover."

Since you had control of the funds (a check) it was not a trustee-to-trustee transfer that would qualify for a rollover.

Click this link for more info on Inherited IRA. 

[mctugie]

So my financial advisor told me that I had 60 days to roll over the proceeds. So even though I got the check, I had 60 days to deposit it in the decedent IRA. Is that correct?

[dmertz]

Your financial advisor was wrong.  These distributions were not eligible for rollover and now constitute excess regular IRA contributions subject to penalty unless corrected by a return of contribution.

If your financial advisor gave you this advice before the distributions were made from the inherited IRA annuities, you might have a legal case against the financial advisor.  The money could have been moved by nonreportable trustee-to-trustee transfer, but, because you are a non-spouse beneficiary, not by distribution (which did happen) and 60-day rollover.