form 1099-R generates error

[user17736829280]

I rolled over my 401K to a traditional IRA in 2025.  I received two 1099-R forms associated with this rollover.  The first 1099-R shows the total amount transferred in box 1, zero in box 2a, and code G in box 7.  The other 1099-R form shows zero in box 1 and 2a a smaller number in box 5 and code B in box 7.  When I enter the second 1099-R into TurboTax an error message is generated during review that states "Form 1099-R (Fidelity Investments): Gross distribution amount should have a value and should be greater than $0.50".  How do I proceed to clear the error?  Thanks.

[ThomasM125]

Code B in box 7 means you had a distribution from a ROTH IRA. As such, there should be an amount in box 1 which reports the gross distribution. Since you said you rolled over a 401K balance to a traditional IRA, I'm not sure what the second 1099-R is reporting. I suggest you ask the broker what is being reported on the second 1099-R. Since it shows no gross distribution, it may not need to be reported on your tax return.

[user17736829280]

Fidelity says that it is an "after tax balance that was growing tax deferred.  In this case, it would be directed to a traditional IRA".   Does this make sense?  This certainly was associated with the 401K to Traditional IRA rollover.  I notice that if I "fool" Turbotax by putting $1 in box 1 (instead of zero), and leaving zero in box 2a, then no error is reported.

[dmertz]

Code B in box 7 with $0 in box 1 and an amount in box 5 reports a distribution of unrecoverable basis in designated Roth contributions.  However, such a form makes no sense unless there was another distribution for a direct rollover from a designated Roth account to a Roth IRA, reported on a Form 1099-R with code H in box 7, or a direct rollover from a designated Roth account to a designated Roth account in another employer's plan, reported with codes B and G in box 7.  The code-G Form 1099-R reports a distribution from the traditional account in your 401(k), not from a designated Roth account in the 401(k).  (The only reason I can think of where such a code-B Form 1099-R would be issued without any other distribution from the designated Roth account is if the entire investment in the designated Roth account became worthless, but that's implausible unless the entire investment consisted of company stock which somehow became worthless.)

[user17736829280]

I just found the Distribution Summary from Fidelity from months ago when the rollover occurred.  A bullet near the top of that statement states "This distribution is from an employee benefit plan intended to be qualified under Internal Revenue Code section 401(a)."

The amounts on the 1st 1099-R form are for the total distribution and is categorized as Non-Roth.

It shows that the amount on the 2nd 1099-R was an "Unrecovered Roth Contribution Basis" and has a footnote stating that it is a "Portion of total distribution consisting of Roth contributions and applicable earnings.  This information will be necessary when rolling over to an IRA or another employer plan."  Everything is associated with rolling over the entire 401K to a Traditional IRA in a single event.  

Does all this make sense?  Do I need to get more information from Fidelity or ask them to correct and reissue the 1099-R(s)?

I need to understand how to put the appropriate information into TurboTax.  Thanks for your help.

[dmertz]

It shows that the amount on the 2nd 1099-R was an "Unrecovered Roth Contribution Basis" and has a footnote stating that it is a "Portion of total distribution consisting of Roth contributions and applicable earnings.  This information will be necessary when rolling over to an IRA or another employer plan." 

That agrees 100% with what I posted.  The question remains:  What happened to the rest of the funds from the designated Roth account?

[user17736829280]

I found a bit more information.  In 2022 the entire Roth balance in my 401K was moved to a Roth.  The Roth balance was less than the Roth contributions to the 401K due to losses.  Also in 2022 the entire after-tax balance in the 401K was also moved to a combination of Roth and IRA accounts, leaving only pre-tax funds in the 401K.  For the 2022 tax year I received 1099-R statements, one for the Roth transfer and one for the after-tax transfer.  The 2022 1099-R Roth statement showed the Roth amount transferred (that was less than the Roth contributions).  In 2025 the entire 401K, containing only pre-tax funds, were rolled over into an IRA account.  The 401K account was then closed.

I received two 1099-R statements for 2025 taxes.  One shows the full amount rolled over from the 401K to the IRA.  The second 1099-R is the issue.  It has zero in box 1 and 2a.  It has the Roth contributions minus the Roth transferred amount (i.e. the loss) from 2022 in box 5 and code B in box 7.  Fidelity state that this loss was carried forward in case more contributions might have been made after 2022.  Because the 401K account was closed, this triggered the second 1099-R.  Fidelity state that there are no errors on that 1099-R.

When I enter the values from the second 1099-R into TurboTax an error is flagged during review stating "Form 1099-R (Fidelity Investments): Gross distribution amount should have a value and should be greater than $0.50".  How do I enter the 1099-R into TurboTax without triggering an error.

Thanks

[dmertz]

You must omit this Form 1099-R.