1099R rollover

[chensou95]

I used 2 different financial institutions to complete my rollover.  Though it was completed within the required timeline to be considered an eligible rollover, it was not completed in the same year.

Box 7 shows 1D, however the entire amount was rolled over. In past years, Turbo Tax has asked the question, "Was this money rolled over" but that question does not pop up for me in this instance and TT is charging me the taxes AND the early distribution and I am not able to correct that EVEN when I go directly to the forms and manually update the checkboxes.  Please assist.

[dmertz]

The code D indicates that the distribution was from a nonqualified annuity or insurance contract.  Such a distribution is not eligible for rollover.  The amount in box 2a of this Form 1099-R is therefore taxable and subject to an early-distribution penalty.

Whatever you subsequently did with the money from this distribution is entirely independent of the distribution.  Perhaps you purchased another nonqualified annuity or insurance contract and your investment in the new contract is the purchase price.  If you put the money into a qualified plan like an IRA, that would constitute an ordinary contribution, not a rollover.

If your intent was to move one nonqualified annuity to another without any tax consequences, that had to be done as a section 1035 exchange with the funds sent directly between the annuity providers.  The codes 1 and D indicate that this was not done.