IRA to ROTH Conversion without a 1099R

[TomAuciello]

I had a traditional IRA at a large bank that contained an annuity policy.  I converted it to a ROTH mid year 2019.  The insurance company that held the policy sent me a letter telling me the value of the conversion that would be reported to the IRS.  Neither the bank holding the IRA (now ROTH) account with the policy, nor the insurance company would send me a 1099R for the conversion.  They said the policy was kept intact (not liquidated) and therefore would not generate a 1099R.  I owe taxes on this conversion, but I can find a way to get it into TurboTax (CD version).  Whenever I try to open a form 8606 to report the conversion, TurboTax insists on linking it to a 1099R, which I do not have.  I only have a letter telling me the amount "reported to the IRS."  Can anyone help?

Thanks............ Tom A

[macuser_22]

@dmertz  - Is this even allowed?

Since a Traditional IRA is before tax money and a Roth is after-tax money I don't know how it would even be possible to convert an annuity held in a Traditional IRA to a Roth at all.    I paged user @dmertz who might know.

[dmertz · Accepted solution]

"They said the policy was kept intact (not liquidated) and therefore would not generate a 1099R."

Perhaps they believe that the transfer was a trustee-to-trustee transfer was from one traditional IRA to another traditional IRA and is therefore non-reportable.  However, moving a traditional IRA to a Roth IRA always requires reporting on a Form 1099-R.  By law, any Roth conversion is a reportable distribution from the traditional IRA.

You should follow the instructions in IRS Tax Topic #154.  If the traditional IRA custodian still refuses to provide the required Form 1099-R, you'll need to enter a substitute Form 1099-R by marking the "I need to prepare a substitute From 1099-R" box on the Tell Us Which 1099-R You Have page.

https://www.irs.gov/taxtopics/tc154

[Edit:  Certainly a deferred IRA annuity can be converted to Roth.  It's less clear how conversion of an immediate annuity would be converted due to the difficulty in determining the taxable value of the annuity.]

[macuser_22]

But how would you "value" an annuity policy to determine the taxable amount at the time of conversion?

[TomAuciello]

They determined a value for the annuity on the conversion date and stated it in the "letter" they sent me.  And they specifically stated it was a IRA to ROTH conversion.  But, the letter is not a 1099R.  I'll try your suggestion of creating the 1099R in Turbotax.  Thanks.

[macuser_22 · Accepted solution]

If you are going to use a substitute then enter the amount of the conversion (from the letter they sent) in box 1 AND box 2a, check the "taxable amount not determined" box 2b, check the IRA/SEP/SIMPLE box and use a code 7 (if you are over age 59 1/2) in box 7, or a code 1 if under (there will be no early distribution tax on a Roth conversion anyway).

Say  when the interview asks that you moved the money to another retirement account and then that the entire amount was converted to a Roth IRA.

Enter an explanation statement why you are using a substitute 1099-R and the steps you took to get a 1099-R an the company refusal.