1099-R Distribution Code 7D

Forum|Forum|2 years ago
February 13, 2024
1 reply
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My 1099-R from my life insurance co has a Distribution code 7D. I contributed $125,000 (Box 5) and took out $125,079 which is stated in Box 1. Box 2 (Taxable Amt) shows $79 which is the amt earned during the short period I owned this annuity. The TurboTax progam shows that I owe tax -more than $22,000- in tax on this distribution. Did the insurance co use the wrong code? How can I owe this much tax when I paid $125,000 for this investment?

KrisD15

Level 15

That should be the proper way to report the 1099-R.

I did enter a 1099-R with similar numbers and only 79 was taxable.

If I selected "YES, the IRA/SEP/SIMPLE box is checked on a following screen, the total distribution became taxable.

Please review your entry of the 1099-R and the answers selected on the following screens.

Only 79 should be taxable.

Check your 1040 line 4b

Please continue the question if you are still having issues and provide any additional information about the 1099-R that might be pertinent. If thew 1099-R was imported, you might want to delete it and enter it manually.

Desktop switch to FORMS

TurboTax Online:

Select Tax Tools on the left side-bar

Select Tools from that drop-down

Select “View Tax Summary” on the TOOLS CENTER screen

Select “Preview my 1040” which now appears on the left side-bar

To Delete a Form using TurboTax Online:

Select Tax Tools on the left side-bar

Select Tools from that drop-down

Select “Delete a form” on the TOOLS CENTER screen

Select the form, schedule and/or worksheet you wish to remove (1099-R)

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dmertz

Level 15

TurboTax will properly flag an error if the IRA/SEP/SIMPLE box is marked when code D is present. Code D indicates that the distribution is not from an IRA. If editing the Form 1099-R to make sure that the form has been entered correctly does not correct the problem, I agree that deleting and reentering the Form 1099-R is appropriate. When asked, make sure to indicate that the amount in box 2a is the taxable amount.