I was a beneficiary in an IRA and got a lump sum payment. Is the gross distribution the taxable amount even though the 1099R shows an employee contribution?

[confucious52]

Since there were employee contributions, it would seem like the taxable portion would be the excess of the gross distribution over the employee contributions but maybe it makes a difference if the IRAs were ROTH or pre-tax contributions?

[dmertz · Accepted solution]

A Form 1099-R for a distribution from an IRA should never have an amount in box 5.  This is almost certainly a distribution from some kind of account other than an IRA and I expect that IRA/SEP/SIMPLE box on the From 1099-R is not marked.

Yes, the amount in box 5 is the amount of this distribution that is not taxable.  The taxable amount should be present in box 2a, the difference between the amount in box 5 and the amount in box 1.  (I'm assuming that there is no amount shown in box 6.)

When you enter this Form 1099-R, be sure to enter it accurately, with the state of the IRA/SEP/SIMPLE box on TurboTax's 1099-R matching that of the Form 1099-R provided by the payer.  Since this is apparently not an IRA, this box should not be marked and TurboTax will include the gross amount from box 1 on Form 1040 line 16a or Form 1040A line 12a but include only the taxable amount from box 2a on line 16b or 12b.

[DS30]

It depends

When it comes to a distribution from retirement fund, if all contributions (whether from you or your employer) were pre-taxed contribution, then the entire distribution would be considered taxable in the year it was received.

(This is different from a Roth IRA where contributions are made with post-taxed money and a distribution of previously taxes contributions are considered tax-free.)

Please click this link IRS - Traditional IRA for more information.