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ramdisk
New Member

1099-R from deceased grandparent There is an amount in box 1 blank box 2a, box 2b only Total distribution checked, same amount in box 5 as box 1 dist code D4

No other boxes checked, turbo tax calculates $0 got letter from IRS saying I should have been taxed on all of box 1 though from Tried re-entering as amended, but still says I would owe $0
on amended 2021 taxes. 
Received 1099-R on distribution from deceased grandparent who was 99 in 2021
Box 1 $Amount
Box 2a Empty
Box 2b Tax amount not determined is UNchecked
Box 2b Total distribution checked
Box 5 Same as Box 1
Box 7 code D4
3 Replies

1099-R from deceased grandparent There is an amount in box 1 blank box 2a, box 2b only Total distribution checked, same amount in box 5 as box 1 dist code D4

the entire payment is taxable...even though Box 2 is blank....in TT, Box 2a must equal Box 1. 

 

also, whose SSN is on this form? if your grandfather's. it doesn't go on your tax return in any event. 

 

or is it your SSN as this payment is a beneficial payment from his pension (which is why Box 7 is a '4'). if that is the case, it does belong on your tax return - again BoX 2a must equal Box 1 

ramdisk
New Member

1099-R from deceased grandparent There is an amount in box 1 blank box 2a, box 2b only Total distribution checked, same amount in box 5 as box 1 dist code D4

I am still confused as to why TT did not mark this as an issue, I even went back and entered into TT just like it is on the form again as an amended return and it still didnt ask any additional question or give details that I needed to enter something in 2b even though its blank on the form sent by the financial institution.  Since the same value is in box 5 as box 1, it looks like it is taking the difference (which is 0) as the number for taxable income for the form.  The SSN is my wife's who received the dibursement after her grandmother's death. 

Again, really confused why TT did not flag this if I should have had something in box 2a even if it was blank on the form sent by the financial institution. 

dmertz
Level 15

1099-R from deceased grandparent There is an amount in box 1 blank box 2a, box 2b only Total distribution checked, same amount in box 5 as box 1 dist code D4

The letter from the IRS is incorrect.  You'll need to dispute that with the IRS.  This represents income to the beneficiary (you, I assume) that was required to appear on Form 1040 line 5a.  However, it is nontaxable because the amount in box 5 equals the amount in box 1, so it's proper that it was excluded from line 5b.

 

The payer should have put a zero in box 2a because it is apparent that the taxable amount is zero.  Some payers mistakenly believe that a blank entry in box 2a is the same as a zero entry if box 2b Taxable amount not determined is unmarked, but that is not precisely following the instructions for Form 1099-R.  A strict reading of the instructions indicates that a blank box 2a means that the payer does not know the taxable amount and, if that is the case, would necessitate also marking box 2b Taxable amount not determined.  It's possible that the IRS examiner got confused by the blank box 2a and overlooked the amount in box 5 and the fact that box 2b Taxable amount not determined was not marked.

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