401k to traditional ira rollover, in-kind stock rollover to a brokerage acct, & after-tax money to a Roth IRA but only one 1099R which doesn't reflect the NUA or basis?

[TTL]

The one 1099R doesn't reflect the in-kind stock rollover for NUA purposes? I know I have to pay tax on the basis of stock transfer this year and I have that info, but 1099R doesn't reflect. I can split one 1099R into multiple sheets in TT to reflect the Roth conversion and the traditional rollover. Should I create another 1099 sheet to reflect the in-kind stock transfer for NUA purposes? I called the provider and they said I don't need another 1099? Should I file a 1099R substitute instead? Thanks.

[dmertz · Accepted solution]

If no amount is reported in box 6, the Form 1099-R is indicating that you did not receive a distribution of NUA.  If the Form 1099-R is erroneous, contact the payer for a correction.  However, perhaps the payer doesn't believe that you qualify for a distribution of NUA.  To be eligible for NUA treatment, you must receive a lump-sum distribution, meaning that you must in a single calendar year following the qualifying event take distributions of the entire balance balance to your credit in the plan.  Any calendar year prior to the NUA distribution year in which you take a distribution after the qualifying event disqualifies your distribution from being a lump-sum distribution.

As for the rollover being split between traditional and Roth IRAs, yes, you need to split the Form 1099-R into two, one for the portion rolled over to the Roth IRA and the other for the portion rolled over to the traditional IRA.

[TTL]

Thanks, I am waiting for the provider to update the 1099R, because I did it correctly, taking a total distribution, rolling over after tax to Roth, and pre-tax to IRA. I did it all at once in a single year after retiring so it was a lump-sum distribution. The problem is in the meantime I wanted to pay my taxes in full so I don't have a penalty, because I didn't do estimated taxes except for the last payment this January. I did the Roth conversion at the end of the year, but IRS doesn't care when, they just want their money. Can I just add another 1099R with the info, basis, NUA, and gross distribution of the stock? Would the distribution code be G since it happened at the same time? Would IRA/SEP/Simple box be checked? Thanks for responding in advance.

[dmertz]

I would wait for the corrected Form 1099-R and make an estimated tax payment, if necessary.

[TTL]

OK thanks I appreciate the advice, and if they don't correct it, then do the substitute 1099 with the explanations I guess.

[dmertz]

Yes.  I believe that doing a substitute Form 1099-R requires you to paper-file by mail.  That means that it might incur delays in processing while it's being looked at by an IRS examiner.

[TTL]

WOW, that's good to know, I hope the provider corrects the 1099-R form issue then. Thanks for all the help.