Frustration with the 1099-R sent to my by my investment company and the TT interview questions

[DD_90808]

In 2024, I did a direct transfer (I get confused when to say transfer or rollover) of my one and only Roth IRA from one company to newly set up and empty Roth IRA with  another company.  I am 55 and still working.   I made one contribution to the original Roth IRA about 25 years ago.

It was explained to me that even though I am calling it a Roth IRA, it does not carry full Roth status until I reach 59 1/2 and the contribution is 5 years old.  Even so, I would still expect that TT should populate the amount from box 1 of my 1099-R into line 4a of the 1040.  And "Rollover" should appear adjacent to 4b of 1040.  And 4b of 1040 should be 0.  Then, I worry about proving all the details of Roth status when I am ready to take distributions.  I think this is the difference between a "designated Roth IRA" vs Roth IRA.

On the paper 1099-R, my box 2a is blank.   Both boxes in 2b are checked.  Box 7 is code G.  And the IRA/SEP/Simple box is empty.  If I enter the 1099-R exactly as printed, the amount goes into the Pension line and TT tries to calculate a substantial tax.

Over a couple of long experimental sessions going over the TT interview questions.  Followed by a long few phone calls to my friendly college buddy CPA, it was suggested that I enter the number 0 into box 2a and check the IRA/SEP/Simple box on the electronic data for this 1099-R instead of writing an explanation and manually over-riding the 1099-R Summary.

If my understanding of Tax Principles and the 1040 is correct, am I good to go?  Or is there another solution.

[dmertz]

Code G (with no accompanying code B), indicates that the account is a traditional account in an employer plan, not any kind of IRA and not any kind of Roth account.  A rollover of a traditional account in an employer plan to a Roth IRA is taxable.  The taxable amount shown in box 2a of the Form 1099-R  of the distribution should be included on Form 1040 line 5b.  If a greater amount is shown in box 1, the box 1 amount should be included on line 5a.  The ROLLOVER notation will be shown next to these lines.

Unfortunately, your collage buddy seems to be basing suggestions on your assertion that the distribution was from a Roth IRA when the form indicates that it was not.  A CPA should have recognized this discrepancy between your assertion and the coding on the Form 1099-R.

If the original account was truly some type of Roth account, it seems that the Form 1099-R was prepared incorrectly.  To address that possibility, please let the forum know if the Form 1099-R has only code G in box 7 and whether there are non-zero amounts in boxes 2a and 5.

[DD_90808]

Thank you dmertz!!! 

Based upon your answer, you have a much better understanding of my problem than anyone else that I have spoken to.  And this includes the company that issued the 1099-R.  I too, want to calculate the tax properly and report the transaction accurately to the IRS.

• Box 2a is blank
• Box 2b is checked for both Taxable amount not determined and Total distribution
• Box 5 is blank, (even though it is blank, I know the correct value from other records)
• Box 7 is "G" only, no additional codes
• Box between Box 7 and Box 8 are blank
• contribution is old and cold more than 10 years old
• I am old, but a few years out from 59 1/2

Is there any other information that would be helpful?

I truly believe that I did a direct rollover of Roth IRA funds from one custodian to a Roth IRA with another custodian.    

The 1099-R is from a large insurance company's "Preference Plus Annuity Unit".  (Is this a problem, because the Tax ID belongs to a unit that typically handles public employee voluntary 403b accounts?)  All of my documents for my Roth IRA with the large insurance company clearly state Roth IRA. 

Not sure if this is relevant, but I also had a 403b with the same large insurance company.  I also did a direct rollover of my 403b account in 2024.  The reporting of that transaction went through TT as expected.  Clean, the 1099-R was not problematic for my answers to the interview questions and no tax owed.

Just in case you were wondering why I opened the Roth IRA with large insurance company instead of a discount brokerage.  I already had a employer 403b with the large insurance company and liked the sales representative.  I know... young and dumb.  Now, I am older and wiser and want to be in funds with more reasonable fee structures.  

In closing, I have tried to call the large insurance company to request a revised 1099-R.  But they were of zero help over the phone.  I am willing to call them again, but I am not sure how to suggest they correct the existing 1099R.  How would you have coded the transaction based upon my description?  

[dmertz]

This Form 1099-R appears to be reporting a direct rollover from a traditional account in an employer plan to another traditional account, perhaps to a traditional IRA.  My guess is that this Form 1099-R is reporting the rollover of the traditional 403(b) account and has nothing to do with the movement of the Roth IRA.

"The reporting of that transaction went through TT as expected."

The form that you described above seems like it would be the one that reports the direct rollover from the 403(b).  Is there another Form 1099-R?

If the Roth IRA was moved via trustee-to-trustee transfer, such a transfer is neither a distribution nor a rollover and is not reportable on your tax return.  You receive no Form 1099-R for such a transfer.