I withdrew money from Tax Shelter Annuity and deposited into Roth IRA. I have 1099-R on income. Do I also show it as a deposit to Roth IRA? No taxes were withheld.

[AnnetteB · Accepted solution]

If you have a Form 1099-R that reflects a direct institution to institution transfer from the tax-sheltered annuity to the Roth IRA, then you do not make a separate entry into your return showing a Roth IRA contribution.

If the transfer was not done directly and you actually received the proceeds of the withdrawal and subsequently deposited the money into the Roth IRA, then you would make the entry into your return showing a Roth IRA contribution. 

[crfjrtyler]

I transferred money from one annuity to another annuity  of a different institution but I was taxed on some of as gross distribution. Is that correct?

[VolvoGirl]

Did you get a 1099R for it?  What code is in box 7?  Did they take any tax withholding out of it?  

 If you are looking at a summary screen or review screen those show the full amount as income and lump a lot of stuff together. You need to check the actual 1040 and make sure it’s right.   For 1099R check 1040 line 4b or 4d for any taxable amount.  If it was a rollover it should say ROLLOVER by it and 0 taxable. 

[crfjrtyler]

my 1099R shows in box 5 $45000 as insurance premium and in box 7 there distribution code 6

[crfjrtyler]

correct in box 7 there is a code 6

[VolvoGirl]

Well Code 6 says it's a tax free exchange.  Where are you seeing it taxed?  I don't know how those work.  I'll page @dmertz 

[macuser_22]

---

@crfjrtyler wrote:

correct in box 7 there is a code 6

---

A code 6 is a 1035 exchange.  The taxable amount on the 1099-R (box 2a) should be 0 and the 1040 form line 4c should have the box 1 amount  and 0 on line 4d (the taxable amount).

Where do you see the tax?

[crfjrtyler]

On my 1040 form 4c and 4d (c Pensions and annuities)  shows over $40000 being taxed but I did not use any of it. It was all transferred to another company

[crfjrtyler]

who can I contact for an official answer?

Should I go to H&R Block?

[macuser_22]

---

@crfjrtyler wrote:

who can I contact for an official answer?

Should I go to H&R Block?

---

I answered your question.  You still have not said just why you think it is taxable.  Is there an amount on the 1040 line 4d?

There is no way to provide more of an answer unless you tell us what you are looking at that makes you think that it is taxable - we cannot see your tax return.

What else do you want?     

[dmertz]

A code-6 distribution CANNOT be deposited into a Roth IRA, so crfjrtyler, your transaction is not the same as was described in the question posted by the person who started this thread.  A code-6 distribution must always have a zero in box 2a and, entered properly, TurboTax will include none of a code-6 distribution as taxable income on Form 1040 line 4d.

[crfjrtyler]

4d shows $43000

[macuser_22]

I suggest that you delete the 1099-R and make sure that 4d is cleared and not coming from somewhere else.  The re-enter the 1099-R.      Box 1 should have the amount if distribution, box 2a must be zero and code 6 in box 7.

Since a code 6 cannot be converted to a Roth and the TurboTax 1099-R interview will not ask about a Roth at all for a code 6 did you change the code to something else?  Perhaps you have a 2nd 1099-R with a different code?

[dmertz]

If code 6 was selected in box 7 of TurboTax's 1099-R form, the amount on Form 1040 line 4d must be coming from something else.  Whenever code 6 is selected for box 7 of TurboTax's 1099-R form, TurboTax always excludes the amount from line 4d.  TurboTax also knows to flag an error if any other code is selected for the second of the box 7 selections on TurboTax's 1099-R form since code 6 is not permitted to be combined with any other code.