If I received a 1099-R for an IRA disbursement, but transferred all the money to another bank, will I have a tax penalty?

Did you transfer to another IRA plan at that new bank within 60 days?  And had you done anything similar at any other time in 2017?

The full amount was transferred to another IRA plan at a new bank within 60 days. I'm not sure what is meant by anything similar at any other time. We transferred a couple different IRA's from the same old bank to the same new bank and we did this over the course of a couple months, but all the funds were distributed to the new bank within 60 days of being removed from the old bank.

You are only permitted one such transfer every 12 months.  see this:
<a rel="nofollow" target="_blank" href="https://www.irs.gov/retirement-plans/ira-one-rollover-per-year-rule">https://www.irs.gov/retirement-plans/ira-one-rollover-per-year-rule</a>
This could have been avoided by doing a direct bank to bank transfer.

It was a direct bank to bank transfer. The funds from the first IRA we removed from the old bank were issued directly to us, we put them in our checking account, then wrote a check to the new bank. We then decided to transfer the remaining IRA's at the old bank to the new bank and that was done via bank to bank transfer. I do remember the broker saying something about only being able to do one transfer every 12 months

The first one was a rollover that started the 1 year clock for additional rollovers.

Direct trustee-to-trustee transfers of IRA's from one financial institution to another are not limited.

IRS Pub 590B <a rel="nofollow" target="_blank" href="https://www.irs.gov/publications/p590a#en_US_2016_publink1000230570">https://www.irs.gov/publications/p590a#en_US_2016_publink1000230570</a>

Quote
"Waiting period between rollovers.
Application of one-rollover-per-year limitation.

You can make only one rollover from an IRA to another (or the same) IRA in any 1-year period regardless of the number of IRAs you own. The limit will apply by aggregating all of an individual's IRAs, including SEP and SIMPLE IRAs as well as traditional and Roth IRAs, effectively treating them as one IRA for purposes of the limit. However, trustee-to-trustee transfers between IRAs are not limited and rollovers from traditional IRAs to Roth IRAs (conversions) are not limited. "
End quote

Awesome that is very helpful! Thank you both for your help. I just found it odd to receive a 1099-R from the old bank and the new bank shows that no tax documents will be issued to us. So I was curious how we would show that the money was transferred to another, similar IRA to avoid the tax penalty.

See answer below.

You should have (or will receive) a 1099-R for the rollover you did yourself.   (No 1099-R should be issued for the trustee transfer)

Enter a 1099-R here:

Federal Taxes,
Wages & Income
I’ll choose what I work on (if that screen comes up),
Retirement Plans & Social Security,
IRA, 401(k), Pension Plan Withdrawals (1099-R).

OR  Use the "Tools" menu (if online version under My Account) and then "Search Topics" for "1099-R" which will take you to the same place.

Be sure to choose which spouse the 1099-R is for if this is a joint tax return.
Be sure to pick the correct 1099-R type: Standard 1099-R, CSA-1099-R, CSF-1099-R, RRB-1099-R.

If this was a rollover or conversion, answer the question that you moved the money to another retirement account (can be the same account). The screen will open up with choices of where it was moved.

[NOTE: When you get to the "Your 1099-R Entries" screen where you can add another 1099-R, use "continue" to keep going as there are additional interview questions after that screen in most cases. You can always return as shown above.]

It will show as income on the summary screen which shows gross income, not taxable income.

The income will be reported on line 15a  on the 1040 form  with the word “ROLLOVER” next to it if it was a rollover.

The taxable amount will go on line 15b.  In the case of a rollover, that amount will be zero.

I DID receive a 1099-R for the check that I received for the closed out account....but THAT dispersing agency has no way of knowing that I deposited it Immediately into an existing IRA with another agency. 

My TT version ONLY takes me to the charitable contribution.

this is not applicable this year....and the whole amount is carrying to income. ...Please help!

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@MB211 wrote:

I DID receive a 1099-R for the check that I received for the closed out account....but THAT dispersing agency has no way of knowing that I deposited it Immediately into an existing IRA with another agency. 

My TT version ONLY takes me to the charitable contribution.

this is not applicable this year....and the whole amount is carrying to income. ...Please help!

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What code is on box 7 on the 1099-R?

Is the IRA/SEP/SIMPLE box checked?

'7' and 'x' in IRA/SEP/SIMPLE box

Is the code '7'correct to put on the tax form when I deposoted the dispersement myself?

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@MB211 wrote:

Is the code '7'correct to put on the tax form when I deposoted the dispersement myself?

 

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Are you using the online or CD/download desktop version?

I'm using a CD/download.

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@MB211 wrote:

I'm using a CD/download.

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Then is should look something like this:

In one TT community correspondence there was an indication that if you know that the 'Distribution code' was incorrect on the 1099-R you could enter the 'Correct code'.So really that's my question: what is the correct code for a self -driven/indirect

deposit of the total amount into a regular existing IRA to a different institution. 

Code 7 if you are age 59 1/2 or older.