form 1099-R generates error

[user17736829280]

I rolled over my 401K to a traditional IRA in 2025.  I received two 1099-R forms associated with this rollover.  The first 1099-R shows the total amount transferred in box 1, zero in box 2a, and code G in box 7.  The other 1099-R form shows zero in box 1 and 2a a smaller number in box 5 and code B in box 7.  When I enter the second 1099-R into TurboTax an error message is generated during review that states "Form 1099-R (Fidelity Investments): Gross distribution amount should have a value and should be greater than $0.50".  How do I proceed to clear the error?  Thanks.

[ThomasM125]

Code B in box 7 means you had a distribution from a ROTH IRA. As such, there should be an amount in box 1 which reports the gross distribution. Since you said you rolled over a 401K balance to a traditional IRA, I'm not sure what the second 1099-R is reporting. I suggest you ask the broker what is being reported on the second 1099-R. Since it shows no gross distribution, it may not need to be reported on your tax return.

[user17736829280]

Fidelity says that it is an "after tax balance that was growing tax deferred.  In this case, it would be directed to a traditional IRA".   Does this make sense?  This certainly was associated with the 401K to Traditional IRA rollover.  I notice that if I "fool" Turbotax by putting $1 in box 1 (instead of zero), and leaving zero in box 2a, then no error is reported.

[dmertz]

Code B in box 7 with $0 in box 1 and an amount in box 5 reports a distribution of unrecoverable basis in designated Roth contributions.  However, such a form makes no sense unless there was another distribution for a direct rollover from a designated Roth account to a Roth IRA, reported on a Form 1099-R with code H in box 7, or a direct rollover from a designated Roth account to a designated Roth account in another employer's plan, reported with codes B and G in box 7.  The code-G Form 1099-R reports a distribution from the traditional account in your 401(k), not from a designated Roth account in the 401(k).  (The only reason I can think of where such a code-B Form 1099-R would be issued without any other distribution from the designated Roth account is if the entire investment in the designated Roth account became worthless, but that's implausible unless the entire investment consisted of company stock which somehow became worthless.)

[user17736829280]

I just found the Distribution Summary from Fidelity from months ago when the rollover occurred.  A bullet near the top of that statement states "This distribution is from an employee benefit plan intended to be qualified under Internal Revenue Code section 401(a)."

The amounts on the 1st 1099-R form are for the total distribution and is categorized as Non-Roth.

It shows that the amount on the 2nd 1099-R was an "Unrecovered Roth Contribution Basis" and has a footnote stating that it is a "Portion of total distribution consisting of Roth contributions and applicable earnings.  This information will be necessary when rolling over to an IRA or another employer plan."  Everything is associated with rolling over the entire 401K to a Traditional IRA in a single event.  

Does all this make sense?  Do I need to get more information from Fidelity or ask them to correct and reissue the 1099-R(s)?

I need to understand how to put the appropriate information into TurboTax.  Thanks for your help.

[dmertz]

It shows that the amount on the 2nd 1099-R was an "Unrecovered Roth Contribution Basis" and has a footnote stating that it is a "Portion of total distribution consisting of Roth contributions and applicable earnings.  This information will be necessary when rolling over to an IRA or another employer plan." 

That agrees 100% with what I posted.  The question remains:  What happened to the rest of the funds from the designated Roth account?