1099R

Forum|Forum|5 years ago
February 5, 2021
1 reply
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my Credit Union states that my 1099R for IRA MRD is correct for an indirect rollover with in 60 days from and to the same IRA account but reports the gross distribution as the taxable amount in block 2a while taxable amount not determined is checked in block 2b. Block 7 lists code 7. Federal tax was withheld in block4.

I can not report this way since reporting an indirect rollover with other than zero in block 2a will raise taxable income incorrectly. should I change block 2a to zero and or change block 7 to code G for rollover?

dmertz

Level 15

The form 1099-R provided by the credit union is correct.

Delete and reenter this Form 1099-R exactly as received. Do not modify the amount in box 2a or the code in box 7. When asked, indicate that none of the distribution was RMD, indicate that you moved the money to anther retirement account or returned it to the same account, then indicate the amount that was rolled over.

hlabateAuthor

Level 2

I believe that I solved the issue. I found IRS info that allows filer to change the code if he deems it incorrect and has made attempts to get it corrected. Thus I changed it to a roll over code which would not then consider it taxable and I provided an explanation.

All is good so .far

RaifH

Level 10

Please note that if this was a Required Minimum Distribution (RMD) from your credit union, it is not eligible to be rolled over. According to the IRS, "Amounts that must be distributed (required minimum distributions) during a particular year aren't normally eligible for rollover treatment." There was an exception to this for the tax year 2020 due to the pandemic, but there is no exception in 2021.

If this is not an RMD, please report it as @dmertz outlined above. That will avoid taxation on any of the amount you rolled over as an indirect rollover as long as it was put back in the account within 60 days of receipt.