My gross distribution was $0.87, yes, less than $1. It won't let me enter anything under $1 in the form, I get a red error message with the text: "Enter gross distribution in Box 1"
Since the IRS rounds up anything over 50 cents, just enter $1.
So my 1099-R is for $0.02. The $0.50 rule would say round that to zero. Leaves me in a bit of a pickle.. Round up to the dollar since I have to enter the 1099-R even though I should round down?
Round up to the next dollar, i.e. to $1. One additional dollar of income will not affect your tax calculation or create an error with the IRS. The IRS won't accept decimal amounts and, in many cases, will not accept zero ("0") as an entry.
There are many places in TurboTax where you must make a non-zero entry, primarily to let the program know that you answered the question and that the answer makes some sense.
In this case, entering "$1" tells the program that you didn't forget to answer the question and that you had at least some amount of a mortgage loan balance to justify claiming an interest deduction.