I rolled over my 401k into a traditional ira where do i input it in turbotax

[macuser_22]

Same answer as above.  line 4a would be 35,000, 4b would be 15,000 with the word "ROLLOVER" next to it (under the 4a amount).

[Tushi_Florida]

OK. so no need to enter 15,000 twice in 4a (one for rollover and one for conversion)? you are sure about it?

[macuser_22]

A conversion is no different that any other Traditional IRA distribution that is 100% taxable.  The box 2a amount goes  on line 4b and nothing on 4a, but there are many exceptions which is why I had to ask so many questions.   If the Traditional IRA had any non-taxable basis, then the answer would be different.  If there were other 1099-R's besides those 3 then the answer might be different.

(Some people want to interrupt the convoluted line 4 IRS rules differently.)

[Tushi_Florida]

Thanks. Xchange sometimes stops to post my comments here.

the point is that 4a is referred two times for situation I describe.


if you converted trad. IRA to Roth:

"Exception 2. If any of the following apply, enter the total distribution "on line 4a" and see Form 8606 and its instructions to figure the amount to enter on line 4b."

"3. You converted part or all of a traditional, SEP, or SIMPLE IRA to a Roth IRA in 2018."

If you rolled over 401(k) to trad. IRA

"Enter "on line 4a" the distribution from Form 1099-R, box 1."

So, we have two mentions of 4a when dealing with rollovers and then conversions (in the same year).

If one rolled over 15,000 one enters 15,000 in 4a and 0 in 4b. But if you also converted that 15,000 to Roth, then one enters 15,000 in 4a and 15,000 in 4b. So we have put 15,000 twice in 4a.

Is it accurate interpretation of Line 4 rules?

[macuser_22]

Some people what to read the rules that way, but it's mixing apples with oranges.  There are two sections in the instructions.  IRA's are in one section and pensions, annuities , 401(k), in the other section.    IRS rules in on section  do not apply to the other section unless that section  specifically refers to the other section.     Many IRS rules define the same thing  different is different sections but the definition only applies to the section that defines it.

The 2 401(k) rollovers are defined in the pension and annuities section that says to put the amount on 4a and nothing on 4b with ROLLOVER next to it.

The Traditional IRA conversion is defined in the IRA section only and what happened  with the 401(k) is independent of the IRA rules that say if only one 1099-R and it is all taxable then the taxable amount goes on 4b and nothing on 4a.  You cannot apply the pension rules to an IRA from a different section of the rules.

(This subject has been argued to death in other threads and I am not going to discuss further.  Until the IRS clarifies it's own convoluted instructions it is pointless.   The IRS created this mess by combining two previous lines into one line but did not change the rules to accommodate that combination of lines.  That is how they "simplified" the form.)

[Tushi_Florida]

I totally agree about how IRS makes taxpayers filing easier :(

But does not your point that Roth conversion if "it is all taxable then the taxable amount goes on 4b and nothing on 4a" contradicts what 1040 says in exception 2 (enter the total distribution "on line 4a" and see Form 8606 and its instructions to figure the amount to enter on line 4b.")?

[macuser_22]

I am assuming that you did not have any non-deductible basis in the Traditional IRA that would make the conversion only partly taxable and the 8606 would apply.  

But, yes, to answer the question, if the Traditional IRA contained any after-tax "basis" money then the taxable amount must be calculated on a 8606 form lines 6-15 and the 1099-R box 1 amount would go on line 4a and the 8606 taxable amount which would be less, on line 4b, but if the box 1 amount and the taxable amount is the same then line 4a is blank.   (That is the reason that box 2b - not determined - on the 1099-R is checked, to allow for the possibility of preexisting basis in the IRA that makes the taxable amount less than the box 2a amount.)

This is why is is difficult to give a "one size fits all" answer to 4a/4b questions since there are many variables.

[Tushi_Florida]

for 8606 calculation I meant part II, line 16-18 (when basis is 0). Everything is taxable. does it affect 4a/4b story?

[macuser_22]

No.

[Tushi_Florida]

Hi, I think I finally figured out how to do it. You were right. I would just add the relevant notes from pub 590-a and 590-b and Tax Guide 2018 to illustrate the point.

from pub 590-a

1. Rollover From Employer's Plan Into an trad. IRA

"Reporting rollovers from employer plans.
Enter the total distribution (before income tax or other deductions were withheld) on Form 1040, line 4a."  ....Enter the remaining amount, even if zero, on Form 1040, line 4b. Also, enter "Rollover" next to Form 1040, line 4b.

2. from pub 590-b
Are Distributions Taxable?
"Reporting taxable distributions on your return.

Report fully taxable distributions, including early distributions, on Form 1040, line 4b (no entry is required on line 4a),".

So, if one rolled over two 401(k)s to trad. IRA and then converted one of them into Roth, rollovers goes on 4a and conversion (taxable distribution?) goes on 4b and no entry on 4a. makes sense? though 'no entry' note still contradicts 1040 4a/4b Exception 2 rules.

[macuser_22]

It says "fully taxable".   There is no exception 2 if fully taxable.  Exception 2 is when it is not fully taxable.

[Tushi_Florida]

Yes, you are right. It does not really matter Exception 2 when it is fully taxable. Everything goes to 4b and nothing in 4a. So, there is no contradiction between pub 590-B and 1040 Exception 2. I wish they have just added that simple statement that if conversion is fully taxable ignore 4a, just go for 4b. I guess it is written for the purpose that you might have non-taxable portion and then total goes in 4a and only taxable portion in 4b. Now it all makes sense.