IRA Rollover Problems -TT 2019

[rkedd]

I have an inherited IRA from a family member that passed away. I have rolled it over into a new IRA. However, when I enter the 1099-R in Turbo Tax it does not give me a screen asking what I did with the funds. Consequently, it shows the whole amount as taxable. What is the problem?

[dmertz]

A distribution paid to a non-spouse beneficiary is not eligible for rollover and the code 4 Form 1099-R indicates that this was a distribution.  An IRA inherited by a non-spouse beneficiary can only be moved by non-reportable trustee-to-trustee transfer.  TurboTax knows not to allow a code 4 From 1099-R received by a non-spouse beneficiary to be indicated as rolled over.

If the distribution was actually paid directly to the new inherited IRA and not to you personally, there should have been no Form 1099-R to report and you would need to get a corrected Form 1099-R showing that $0 was distributed from the original inherited IRA.

If the distribution was actually paid to you, the new custodian should not have allowed the money to be deposited into an inherited IRA and doing so creates an excess contribution subject to penalty.