Tax Year Prior to 2020: MegaRoth Conversion

[pixelrogue1]

Similar to the backdoor IRA conversion, I am needing to record a megaroth conversion. Presume the steps would be similar, however new territory and good to know the steps in advance if anyone knows.

[VictorW9]

Please explain a little more on exactly what kind of transaction you are trying to enter into into TurboTax.

[dmertz]

If the entire distribution from the qualified retirement plan was rolled over to the Roth IRA, simply enter the Form 1099-R reporting this distribution.  The Form 1099-R should show the taxable amount in box 2a and the nontaxable amount in box 5.  If you insead split the rollover with the after-tax portion going to a Roth IRA and the nontaxable portion going to a traditional IRA, you'll need to split the Form 1099-R into two for entry into TurboTax, one for each portion.

[pixelrogue1]

1) Roth 401k contribution made.

2) After tax contributions to Traditional 401k made, then "converted" to Roth IRA (no gains/losses)

Want to ensure I am entering the information properly so TT sees this as an after tax contribution, non-taxable event. 

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Oh, and to add to the topic, we sold a property and used a 1031 exchange for the purchase...all Q4 2019. Not rented until Q1 2020.

[dmertz]

In that case the Form 1099-R that you received from the plan for the distribution from the traditional 401(k) account should have the same amount in box 5 as is in box 1 and box 2a should have a zero for the taxable amount.  Simply enter this Form 1099-R and answer the follow-up questions to indicate what you did with the distribution.  If the Form 1099-R has code G in box 7 indicating a direct rollover, simply indicate that the rollover was to a Roth 401(k) and TurboTax will treat it as nontaxable.  You should see the gross amount included on Form 1040 line 4c but see it excluded from the taxable amount on line 4d, with the word ROLLOVER next to the line.

[pixelrogue1]

The Traditional has a 1099-R, while I am not seeing a 1099 for the Roth contribution (one not needed for Roth?)

I am looking at the 1099-R now, and you are right.

1 = contribution amount.

2A = $0.00 taxable. 
5 ~ actually there is no value here in field 5.

7 = G (distribution code)

Well, guess I was expecting this to be more challenging, based on the similarities with the backdoor IRA conversion which is confusing and awkward to properly document. 

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Wow, that all worked on the first try. Thank you!

[dmertz]

If box 2b Taxable amount not determined is not marked, the payer really should have put in box 5 the same amount as is in box 1.  However, TurboTax will go by the amount shown in box 2a as the taxable amount.  (I assume that there is nothing in box 6; it's impossible for box 6 to equal box 1.)

The reason that it's more simple that an IRA conversion is that there is no reporting of this on Form 8606.  Form 8606 has nothing to do with distributions from a 401(k).