Indirect IRA rollover

[Derrick6]

When entering 1099R  for IRA distribution, there is no question being asked relative to whether any portion of the distribution was an indirect rollover.   I can shift from "step by step"  to "forms" mode within turbotax, then go to the 1040 and do an overide at (4B) but its still not deducting the rollover portion from the taxable amount.  I have even gone into forms and  drilled down into the 1099R  for the company which made the distribution and manually put in "the rolled over amount", but the system is just not doing the subtraction.   Obviously I am doing something wrong, but I cannot see what it is that I've overlooked.   Any thoughts ????

[JohnB5677]

When you go through the questions for the 1099-R there is a way to handle this.  Once your on the screen where you entered the information for the 1099-R:

1. [Continue]
2. NO you did not inherit this IRA
3. When asked What did you do with the money?
4. Select you moved the money to another retirement account.
5. There will be a drop down
6. Select I did a combination of rolling over, converting, or cashing out money
7. Enter you rolled over amount and continue through the questions.

[dmertz]

What is the code in box 7 of the Form 1099-R provided by the payer?

Is the IRA/SEP/SIMPLE box marked?

Is a nonzero amount shown in box 2a?

Is any amount shown in box 5?

[Derrick6]

Box 7 is 7 which is correct.   IRA, SEP box is checked.

The 1099R is correct.  The issuer does not know there was an indirect rollover, so they are showing the entire amount as a regular distribution.    The problem is finding where to enter the rollover amount so that it gets deducted on 1040 (line 4B).   Nowhere in the 1099R entry process does is pose the question.   Even if I go directly to the 1040 line 4b and do a manual over-ride  its not reducing the line 4B total in the far right column.

[Derrick6]

John

Problem is the window your referring to are not coming up.  I have gone thru the entry process for the 1099R several times, hitting continue as you mentioned.  Its asking if we used any distribution money for disaster relief, but does not pose the key questions you mentioned.

[dmertz · Accepted solution]

Presumably this distribution was not an RMD because RMDs are not eligible for rollover.  If it was an RMD and was all RMD, TurboTax is correct not to ask What Did You Do With The Money From XYZ.

If this distribution was not all RMD, delete and reenter the Form 1099-R.  I'm not aware of any other circumstances where TurboTax would not present the necessary question when entering a code 7 Form 1099-R with the IRA/SEP/SIMPLE box marked.

(Presumably you did not have the money transferred to charity, otherwise you would not have the money to roll over.  Also, presumably you did not indicate that you inherited this IRA since the code 7 indicates that it is not an inherited IRA.)

[Derrick6]

Congratulations - you nailed the problem.   My handling of the RMD was the culprit and I was beginning to suspect that.   My distribution easily exceeded the RMD, so was I not filling in the blanks where it asks what amount of each distribution was used toward RMD.   Without filling that out, the system assumes all of it was RMD and does not even present the screen which asks about rollovers.

[JimJim]

I have the same problem with a indirect rollover.

The form does NOT do what you say after "continue", there is no question about what did you do with the rollover, or anything about moving it to another acct. Perhaps the form or program was changed between February and now ??

I'm stuck !  I do not want to pay tax on the rollover.

I assume a indirect rollover is having the IRA check sent to me, then depositing it into another IRA acct within 30 days.

[JimJim]

code is #7, yes the IRA/Sep/Simple is checked and there is a amount in box 2a and nothing in box 5

[dmertz]

JimJim, If you indicated that the entire amount was RMD, TurboTax will not present any questions about a rollover since such a distribution is not eligible for rollover.  If you indicated that the amount that was RMD was less than the box 1 amount, TurboTax will ask what you did with the money.  This behavior in TurboTax has not changed for many years.  (I assume that you did not indicate that this was an inherited IRA since code 7 indicates that it was not.)

[JimJim]

I did not say anything about a RMD . I did take a RMD, but that's on another 1099R and was at a different time.

I took a distribution in it's entirety from one firm and then rolled it over to another firm into an IRA a few days later. Problem is that the firm shows it as a distribution and I don't see how to reconcile it as a rollover so it's not taxed. Code 7 is shown on line 7 and I picked a rollover (G) from the drop box .

[dmertz]

One other reason that TurboTax would not ask what you did with the money is if you indicated that all of the money was transferred to charity (as a Qualified Charitable Distribution);  rolling over a distribution and treating it as a QCD are mutually exclusive.

Under the circumstances, even though code G with the IRA/SEP/SIMPLE box marked is to be used only to indicate a direct rollover from an IRA to a qualified retirement plan like a 401(k) (which is not what you did), picking code G instead of code 7 will give the correct taxable result.  Substituting code G for code 7 should not be done if there was any tax withholding.  For a code 7 Form 1099-R entered properly (without indicating that it was all RMD, without indicating that it was all transferred to charity and without indicating it was a distribution from an inherited IRA), TurboTax will ask what you did with the money.  If it doesn't, you should delete and reenter the Form 1099-R (manually).

[Derrick6]

JimJim - I am the one who originally posted the question.   I remember also running into this same problem a few years ago and could not remember how I resolved it.   Bottom line is it all relates to how you answer the question about RMD.   That's the key.   You need to tell the software how much of the total distribution was RMD and if there is excess it will ask what the appropriate questions concerning rollover.  So for example if you had a total distribution of $20,000 and $15K was indirect rollover, then show RMD as $5000.  The software is not so much interested in tracking the accuracy of your RMD amounts, but uses this interview  process to determine if additional money may have been rolled over.

[JimJim]

I do appreciate your efforts, however you keep making this more complicated than it is. This is NOT about a RMD   That was done at a prior date and I have a separate  1099R for the RMD transaction.

I had the total amount of an  IRA sent directly to me.  So, the entity thinks that I took it and kept it.

On the1099R the box 2A is marked with the gross distribution amount as taxable. (shows the taxable amt not determined)

The distribution code is 7 and IRA/SEP box is checked.

I rolled the entire check into another IRA acct the day after I received the check. The #7 in Turbotax (I believe) makes the entire amt as taxable, which if rolled over is not the case.

I checked #7 in the 1st box (to match the code on the 1099R) , then in the 2nd drop box I selected (G) indicating a rollover.

As I see it, (from reading the posts) because this was NOT a partial RMD , the question of what did I do with it is NOT asked.

The entire rollover amount is being shown as income, which if rolled over is NOT the case.

[dmertz]

By entering the code G you are blocking TurboTax from asking what you did with the money.  Codes 7 and G together is not a combination that is allowed by the IRS and TurboTax will not permit you to e-file with this combination entered.