Solved: Inherited IRA - Spousal
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Level 2

Inherited IRA - Spousal

My husband died in 2019.  Merrill Lynch processed the distribution by sending me my husband's RMD, which I had 20% withheld for taxes.  They then rolled the balance into my IRA, which is also at Merrill Lynch.  I'm assuming this is a Trustee to Trustee transfer.  I've received the 1099-R which lists the account total as the Gross distribution.  They also list the same amount as Taxable amount, and then check the box in 2b, Taxable amount not determined.  I enter all the information that is on the 1099-R.  Turbo Tax asks if I contributed the amount of the Federal income tax, which I answer no.  It ask the amount I did rollover, and I enter an amount that is approximately 93% of the Gross distribution.  I think everything is fine until I get to the recap and it shows 100% of the Gross distribution as Non taxable.  When reviewing the input data, Turbo Tax has changed my answer to "I have made additional contributions to my IRA."  What must I do to have Turbo Tax show the my husband's RMD amount included in my taxable income?

1 Best answer

Accepted Solutions
Level 15

Inherited IRA - Spousal

Sorry I misunderstood you to say box 1 was only the RMD.

 

TurboTax does not support doing two different things with a single 1099-R.   The only way you can enter that in TurboTax is by breaking it into two 1099-R's.

 

One with $38K in box 1 and 2a and the tax withholding in box 4 and answer NO that you did not put it in your own account.   Answer the RMD question that all of it was a RMD.

 

On the 2nd 1099-R enter $572K in box 1 and 2a, nothing in box 4 and answer YES that the money was put into your own account. 

 

The 1040 line 4a should then have the $610K and the word ROLLOVER next to it and line 4b, the taxable amount should have $38K.

 

The box 4 amount will be added to all other W-2 and 1099 withholding on line 17.

 

 

Sorry for the confusion.

 

 

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**

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5 Replies
Level 15

Inherited IRA - Spousal

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

 

Is the box 1 amount only the RMD or is it the total amount of the entire IRA?

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
Level 2

Inherited IRA - Spousal

Box 1 is the IRA account total that was the total of the RMD and the rollover.  Box 7, the Distribution code is "4."

Level 15

Inherited IRA - Spousal

Then just enter the 1099-R and say that you did NOT put the money into your own IRA.   The money that went to your IRA was other money, not the RMD that was  reported on that 1099-R.   RMD's are not eligible for rollover.

 

You would only say there were deductible contribution if your spouse had a prior 8606 with an amount on line 14 - if not then say no.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
Level 2

Inherited IRA - Spousal

I'm not getting my point across.  My husband's IRA $610k at death.  His RMD was $38k, which I had 20% withheld.  I rolled the remaining $572k into my IRA.  The 1099-R shows a $610 distribution, taxable amount of $610, and taxable amount not determined.  It also shows federal taxes of $7600.  If I enter the 1099-R and say I did NOT put money in my IRA, won't I have to pay tax on this amount?  I'm having a difficult time getting Turbo Tax to recognize the $38k of taxable income and the $572k rollover.  What am I doing wrong?

Level 15

Inherited IRA - Spousal

Sorry I misunderstood you to say box 1 was only the RMD.

 

TurboTax does not support doing two different things with a single 1099-R.   The only way you can enter that in TurboTax is by breaking it into two 1099-R's.

 

One with $38K in box 1 and 2a and the tax withholding in box 4 and answer NO that you did not put it in your own account.   Answer the RMD question that all of it was a RMD.

 

On the 2nd 1099-R enter $572K in box 1 and 2a, nothing in box 4 and answer YES that the money was put into your own account. 

 

The 1040 line 4a should then have the $610K and the word ROLLOVER next to it and line 4b, the taxable amount should have $38K.

 

The box 4 amount will be added to all other W-2 and 1099 withholding on line 17.

 

 

Sorry for the confusion.

 

 

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**

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