Conversion of 401a to Roth IRA

[george-brackett]

I moved the money in a 401A to a Roth IRA.  When I received the 1099R the Box 1 distribution was 18,416.47 but the box 2A taxable amount was 0.00.  When i question the custodian the answer I received was "you don't get taxed on the money until you take it out."  I thought since it was a conversion to a Roth IRA it should be taxable.  They refuse to correct the 1099R.  When I enter all the info into TurboTax exactly as the 1099-R is written in the IRA Information Worksheet there is a line for Roth IRA that are not taxable at conversion. (I was surprised)  Question 1  Will TurboTax track these pretax dollars in my Roth IRA?      Question 2  Does it track the pretax dollars in the Roth IRA with  form 8606 or some other official form or do I have to track these pretax dollars in the Roth IRA myself?   I am using Turbo Tax Premier

[Critter-3]

If the 401A had after tax contributions then rolling it into a ROTH is not a taxable event since you are moving money between like kind accounts.  

[dmertz]

Presumably this Form 1099-R has code G in box 7.  If box 5 of the Form 1099-R is zero or blank, this From 1099-R is reporting a rollover to a traditional IRA, not to a Roth IRA.  The fact that the payer refuses to change the Form 1099-R seems to imply that you asked for a rollover to a traditional IRA, not to a Roth IRA, and somehow you diverted the rollover to a Roth IRA.

Assuming that box 5 is blank, you can get TurboTax to treat this as taxable by entering a zero in box 5 and telling TurboTax that this was a rollover to a Roth IRA.  However, this might result in the IRS questioning this rollover.  A more proper resolution would be to file a substitute Form 1099-R (Form 4852) with the same amount in box 2a as is in box 1 and providing explanation as to why the taxable amount in box 2a is incorrect.  Filing Form 4852 will require printing and mailing your tax return; a tax return containing Form 5852 cannot be e-filed with TurboTax.

[george-brackett]

Thanks but-  The 401a is held in trust for the ironwokers-  In the info packet from the trust it says if money is rollover to traditional IRA there is no tax consequence but if rolled over to a Roth taxes would be owed.  Don't know why they refuse to send a corrected 1099R

[dmertz]

They won't change it if they have reason to believe that you requested a rollover to a traditional IRA rather than to a Roth IRA.

[Critter-3]

If you bypassed the traditional IRA then simply leave box 2a of the 1099-R   BLANK in the program  then answer questions on the following screens to indicate the CONVERSION  to the ROTH.  

[dmertz]

Critter-3, that's sufficient to get TurboTax to treat it as taxable only if you also have a zero in box 5.  If box 5 is blank and you indicate that it was rolled over to a Roth IRA, TurboTax will assume that the payer meant to put in box 5 the same amount as is in box 1 and will still treat it as nontaxable.