We received a 1099R for a total distribution of our portion of an inherited annuity. The 1099R had box 2b checked for 'Taxable amount not determined' and 'Total distribution' and code 4D for box 7.
How do I enter something 'somewhere' in TurboTax to reflect the true taxable amount for the distribution ?
We know the actual cost basis but can't find a way in the convoluted TurboTax forms or wizard to put the correct basis info in.
Ideas ?
When entering this Form 1099-R, TurboTax will ask if the amount in box 2a is the taxable amount. Answer No, select the use of the General Rule, then enter the taxable amount. TurboTax will place this amount in box 2a for you. (Alternatively you could just enter the taxable amount in box 2a yourself and tell TurboTax that box 2a shows the correct taxable amount since this is the result of using the General Rule in TurboTax.)
As extra information you could enter the cost basis (investment in the contract) in box 5, but TurboTax will already assume that the amount that should have been in box 5 is the amount in box 1 minus the amount taxable amount placed in box 2a.
I can't find any way to enter the correct taxable amount other than putting it in on 2a in entering my 1099R form (which makes it different than the company actually sent to the IRS) and leaving the 2B boxes still checked. Then TurboTax seems to calculate a reasonable answer.
If I leave 2a blank, matching the company's IRS submission, and answer no to the question re: if it is the taxable amount and let it ask more questions, I go down a rabbit hole of crazy questions making no sense on the form that pops up, and TT then tells me the taxable amount it's using is zero (wrong) yet the totals still reflect still taxing the whole thing (really really wrong) rather than the correct tiny amount it should have used.
Calling it a bug. I'll just fix 2a manually and cross my fingers since it does seem to calculate correctly in that case.