1099 R

[jdouc71]

I received a 1099 R from a direct rollover on a Roth IRA. Box 1 and box 2 are blank with box 5 have a dollar amount. Distribution code is R. I can’t enter this as box 1 needs an amount . Called investment company which said this is a loss from what I paid vs the current value at the time of the rollover (a loss). Anyone know how to file this? 

[RobertB4444]

You can't file this nor should you.  You should have received a 1099-R showing the value of the entire rollover amount in box 1 and the taxable amount (probably zero) in box 2.  Box 5 shows your contributions which are used to reduce the total amount in box 1 so that the amount in box 2 is less.  If it is zero there is no reducing it and no purpose to the box five amount.  

If this is indeed the form that they filed with the IRS then you can ignore it - it is informational.  If they are intending this to be the 1099-R for the rollover then they should issue you a corrected form.

@jdouc71 

[jdouc71]

Thanks for the reply. I actually received 3 1099-Rs. 
2 - have amounts listed in box 1 and box 2 are blank.  Distribution codes are “H” and the other “G”. Both forms entered on my taxes to represent the rollover.

1- this is the one in question. Based on your response , sounds like this doesn’t get entered on my taxes? Didn’t know since this was a loss if I enter it and if the irs would be expecting it be entered as a 3rd 1099-r.

Thanks for your help

[dmertz]

The code-H Form 1099-R reports a rollover to a Roth IRA from a Roth account in a qualified retirement plan like a 401(k).  The code-G Form 1099-R similarly reports a rollover to a traditional IRA from the traditional account in the qualified retirement plan.  Those two make sense and must be reported on your tax return.

However, the code-R Form 1099-R is nonsensical if it appears as you say it does.  A code-R Form 1099-R has nothing to do with any rollover.  A code-R Form 1099-R can never have any amount in box 5.  A Form 1099-R cannot have a zero in box 1 unless the form has the CORRECTED box marked to indicate that the transaction previously reported with code R never happened.  A code-R Form 1099-R can never be issued by a qualified retirement plan like a 401(k) because it only applies to traditional or Roth IRAs.

[jdouc71]

When I spoke to Fidelity, they stated when they did the rollover that one of my funds sustained a loss and thus they created one of the 1099’s . Never received one before and I’m planning on leaving it off my taxes . Hope since the irs will also be receiving this as well and if I don’t put it on my taxes it won’t result in a problem. It’s not a corrected 1099.

Thanks 

[GeorgeM777]

Yes, it does not get entered on your taxes.  A 1099-R with a distribution code R is a recharacterization of an IRA contribution.  We assume your recharacterization was made to a Roth IRA, in which case there is nothing to report on your tax return.  

Keep the 1099-Rs for your records.  

@jdouc71

[dmertz]

Are you sure that the form in question does not have code B (or maybe 1 and B)?  That might make more sense, but is still a bit odd.

If it truly has code R, 2022 TurboTax will just ignore the entry of this 2022 Form 1099-R.

[jdouc71]

I’m sorry . It has a code of 1B in box 7. 

[dmertz]

OK, then,  as Fidelity indicated, this form is reporting unrecoverable basis from the designated Roth account in the qualified retirement plan due to investment losses. 

[jdouc71]

So then should we enter it on my taxes ? Sounds like no but wanted to check. Can the losses on this form be deducted?

[dmertz]

Some people suggest that the unrecoverable basis can be reported as negative Other income based on IRS guidance that predates the introduction into the tax code the section on miscellaneous deductions subject to the 2%-of-AGI floor which I think should apply instead; treating this as a miscellaneous deduction subject to the 2%-of-AGI floor would be treating it the same as what the IRS requires for unrecoverable basis from Roth IRAs.  However, the Tax Cuts and Jobs Act of 2017 has suspended such miscellaneous deductions through 2025.

Another school of thought is that this presently unrecoverable basis has been rolled over to the Roth IRA along with the rest of the rollover to the Roth IRA and the code 1B Form 1099-R could be reported as rolled over.

I have no idea which, if any, of these approaches the IRS would find acceptable.

[jdouc71]

Sorry. Box 5 has a distribution code of 1B and box 1 and 2 blank. Fidelity said this is from a loss I had and was calculated when I did a direct rollover . Does this need to be entered on my taxes?

Thanks for your help as this is very confusing.

[ThomasM125]

Box 5 on a form 1099-R would list employee contributions, which would not represent income. Boxes 1 and 3 are the only boxes that would report income, so if they are blank, you should not have to report the 1099-R on your tax return.  @jdouc71

[jdouc71]

Thanks for the response. Since box 5 is a loss, is there anywhere I can enter this? 

[ThomasM125]

Box 5 should report your employee contributions, the amount you contributed to your pension plan. If you received a distribution then it would reduce the taxable amount of that distribution. But since you didn't receive any distributions this year, the amount entered in box 5 will have no affect on your tax return this year. However, you can enter the form 1099-R in the Retirement Plans and Social Security secton of TurboTax, then IRA, 401-K, Pension Plan Withdrawals, (1099-R), but it shouldn't affect your income tax.