1099R incorrectly identifies the transaction as a distribution & should have been a rollover

[sb816_]

I rolled over my traditional IRA from a Financial institution to a Bank. The financial institution issued a 1099 R and identified it as a distribution (marked 7 in the box). The check was correctly sent directly to the Bank FBO to me. The Bank opened an IRA account and deposited the money within 60 days. How do I identify this transaction correctly within Turbo Tax so the IRS doesn't think it was a distribution. The financial institution will not revise the 1099R. Thanks for your help. Susan

[BillM223 · Accepted solution]

In the interview in TurboTax after you enter the numbers for the 1099-R, there will be one or more screens that ask you questions. 

One of them will ask you, "What did [name] do with the money?" Say , "[name] moved the money to another retirement account". Then it will ask you how much of the distribution was handled this way. Now that amount is non-taxable.

Don't worry about the 1099-R.

[sb816_]

Your instructions did not work. I didn't understand you said "In the interview". What does that mean? TT did not ask "what did you do with the money". I tried completing a 4852 but that didn't work either. I need to show that this money was not a distribution but a rollover. How do I go about doing that within Turbo Tax? Thanks

[DoninGA]

@sb816_ When entering the Form 1099-R make sure you checked the box for this being an IRS/SEP/SIMPLE.  After completing the 1099-R you will go through a series of screens, the one labeled Tell us if you moved the money through a rollover or conversion has the option to indicate it was rolled over to another account within the 60 day window - I rolled over some or all of it to an IRA or other retirement account within the time limits (normally 60 days)

[BillM223]

An interview is a series of screens in which TurboTax asks you questions, and you answer.

When you go to Wages & Income->Retirement Plans and Social Security->IRA, 401(k), Pension Plan withdrawals (1099-R), you enter this "interview" in order to answer a series of questions about the 1099-R that you received. 

As I noted, one of the screens will ask you, "What did [name] do with the money?" Then you say , "[name] moved the money to another retirement account". Then it will ask you how much of the distribution was handled this way. Now that amount will be non-taxable.

When I said "Don't worry about the 1099-R." I meant that you don't need to get a corrected 1099-R from the issuer sine they are not inclined to give to you anyway.

"I need to show that this money was not a distribution but a rollover. How do I go about doing that within Turbo Tax?" To do this, you do exactly what I said, and what DoninGA showed you.

[sb816_]

Thank you to DoninGA & BillM223, I didn't realize I should not have entered box 2a on my 1099R Turbo Tax input sheet. I kept entering that box and it would not lead me through those questions that you identified. However, now I have left box 2a blank and entered in box 7 the number 7 (normal distribution) and put a check mark in IRA/SEP/SIMPLE and it seemed to work but I hope the IRS sees that I filled it in correctly. The other question I have is regarding RMD. I fulfilled my obligation with my two Financial IRA accounts however one of the two financial accounts was this 1099R Rollover and when it asked about my RMD contribution I indicated zero. To be clear, I have an IRA account in Financial institution A and an IRA account in Financial institution B.  This 1099R Rollover also is from Financial institution A and that is where I indicated zero contribution because I already fulfilled my obligation. I hope this makes sense and is correct. Thanks for you input!

[BillM223]

The "rollover" does not count towards your RMD. Distributions for your RMD need to be exposed to tax, and the "rollover" is not exposed to taxation. 

You said "because I already fulfilled my obligation." I hope that this means that you took enough RMD from Financial Institution B to cover the RMD from Financial Institution A.