I have a Form 1099-R suitable for Net Unrealized Appreciation. How do I do this in Turbotax Premier?

[rpanneto]

Hello,  Recently retired, and have 4 1099-R's from my brokerage (Fidelity).  Only one of them imported into Turbotax.  One that did not is a classic NUA scenario.  How do I manually set this up in Turbotax to pay Ordinary Income Tax on the taxable amount (Box 2a),?  Also, how to set up so that future distributions are taxed at the Long Term Capital Gains rate?

What forms will I have to manually create and what other steps will I have to perform?

Should I be concerned about the 1099-R's that didn't import?

Thanks!

[ThomasM125 · Accepted solution]

You will receive a form 1099-R reporting ordinary income in box 2(a) and the net unrealized appreciation (NUA) on the stock in box 6. The amount in box 2(a) will be listed as ordinary income on line 5(b) of your Form 1040, pension income. You don't pay tax on the NUA until you sell the stock, at which time the stock sale will be reported on a form 1099-B. So, until you sell any of the stock, you just need to report the 1099-R in the Retirement Plans and Social Security seciton of TurboTax. When you sell stock, you will report the Form 1099-B in the Investments and Investment Income section of TurboTax, and then Stocks, Mutual Funds, Bonds, Other.

[rpanneto]

Thanks for your quick reply, Thomas!

In order to have the Box 2a amount be taxable now as regular income, I must have moved the stock into a private (non retirement) brokerage account, correct?  This is how I ensure that future distributions are taxed as Long Term Capital Gains, correct?

rpanneto

[DanaB27]

Yes, you will have to move it to a non-retirement account.

Please see Want in on a Well-Kept Secret with Big Tax Benefits? Think NUA for additional information.

@rpanneto