How can I enter a non-taxable rollover on Turbotax?

[dmertz]

In this case, TurboTax saying that none of the distribution is taxable is an indication that entry is being treated as a rollover.  The message actually has nothing to do with a 10% early-distribution penalty because the Form 1099-R has code 7, not code 2.  That suggestion I made about that message having anything to do with this penalty was only speculation on my part based on incomplete information at the time.

If TurboTax gives the message saying that the amount indicated as rolled over is not taxable yet it still appears on Form 1040 line 4b, I have no explanation for that.  I know of nothing that can cause that behavior by TurboTax.

[rgaylortx]

Thanks for listening

If you hear a solution please keep me in mind

[VolvoGirl]

Did you try deleting the 1099R?  Delete it and look at your return.  Is line 4 completely empty?

[rgaylortx]

Yes, nothing in 4a or 4b

[VolvoGirl]

Re reading all the posts again you said you entered the 1099R and you also might have downloaded it from Vanguard?  Maybe one of those is still hanging around.  Try deleting any imports too.

[rgaylortx]

Solved 1099R calc problem.  Started completely new tax document and

did 1099R step by step and 1040 showed correct data in 4a and 4b

Ten proceeded to download other data from brokerages.

!040 continued to be OK

Thanks for help

[brandtjm]

When I either enter the 1099-R by hand or download it from TDAmeritrade I never find a screen asking me "When you get to the screen titled "What Did You Do With The Money from (Name of Broker)?" Indicate that you moved the money to another retirement account (or returned it to the same retirement account)." I'm using Turbotax deluxe. I still don't know where to tell Turbotax that I rolled the  money back (5498) into my retirement account.

[macuser_22]

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@brandtjm wrote:

When I either enter the 1099-R by hand or download it from TDAmeritrade I never find a screen asking me "When you get to the screen titled "What Did You Do With The Money from (Name of Broker)?" Indicate that you moved the money to another retirement account (or returned it to the same retirement account)." I'm using Turbotax deluxe. I still don't know where to tell Turbotax that I rolled the  money back (5498) into my retirement account.

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Did you answer yes to the RMD question?   There was no 2020  RMD so the question  must be answered RMD not required to get the next screen.

[Ladybuddy]

I am not asked "What did you do with..." using Turbo Tax Home & Business.   Now what.

[Ladybuddy]

I found it under RMD should have said "no"

[SamS1]

If you are using TurboTax Home and Business, you can review the 1099R input in "Forms" mode by scrolling down the 1099R screen.  

1. Select "Forms" in the upper right hand corner of the screen
2. In the left margin, Select the 1099R from the listing
3. Scroll down the screen reviewing the questions for RMD and Rollovers.
4. When finished, Select "Step by Step" to return to input screens.

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[TurboLover2]

I am having the same issues.

I'm using TT Deluxe desktop.

I took a partial RMD from an inherited IRA early in 2020 and then when the CARES Act allowed it to be rolled over back into the IRA without penalty (no 2020 RMD required) I rolled it back into the same brokerage IRA account the distribution came from in time to comply with the CARES Act requirements.  So it should not be taxable.

No matter what I have done or how I answered the questions, I cannot find any place where it asks me what I did with the distributed funds so that I can designate it as a rollover.

Nothing appears on line 4a of the 1040, and line 4b includes the entire amount of the partial RMD originally distributed.  It does not say "ROLLOVER" next to 4b probably because there was no place that asked me if it was a rollover.

The proper way to handle this would be for the full amount of the distribution to appear on 4a and zero to appear on 4b with the "ROLLOVER" notation.  But I can't find any way to make that happen.  Instead it insists on making this non-taxable rollover taxable.

I was surprised that TT didn't seem to have more careful support for these CARES Act exceptions.

What is the issue here?

[macuser_22]

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@TurboLover2 wrote:

I am having the same issues.

I'm using TT Deluxe desktop.

I took a partial RMD from an inherited IRA early in 2020 and then when the CARES Act allowed it to be rolled over back into the IRA without penalty (no 2020 RMD required) I rolled it back into the same brokerage IRA account the distribution came from in time to comply with the CARES Act requirements.  So it should not be taxable.

No matter what I have done or how I answered the questions, I cannot find any place where it asks me what I did with the distributed funds so that I can designate it as a rollover.

Nothing appears on line 4a of the 1040, and line 4b includes the entire amount of the partial RMD originally distributed.  It does not say "ROLLOVER" next to 4b probably because there was no place that asked me if it was a rollover.

The proper way to handle this would be for the full amount of the distribution to appear on 4a and zero to appear on 4b with the "ROLLOVER" notation.  But I can't find any way to make that happen.  Instead it insists on making this rollover taxable.

What is the issue here?

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Delete the 1099-R and re-enter to reset your answers.

The only purpose of the "is this an inherited IRA" question is to prevent rolling over an inherited IRA that  normally is not allowed.   Say NO, it is not inherited to bypass the block.

[TurboLover2]

Okay I found a way to make the 1040 come out correct.

The 1099-R reports box 7 as Code 4 (Death).

I changed the code to code G "Direct Rollover and rollover contribution"

This caused line 4a on the 1040 to include the full amount of the partial RMD distributed and line 4b to be zero with the word "ROLLOVER" noted.

I am not sure if code G is the proper code they should have used on the 1099-R and they made a mistake, but I do know that the 1040 is now properly completed and that's what counts.

I suspect that the code 4 was a mistake because the person who died died in 2019, not 2020, and I suspect that code is only for the year of death.

Anyway, wanted to share my solution in case it can help someone.

[TurboLover2]

macuser_22 wrote:

"The only purpose of the "is this an inherited IRA" question is to prevent rolling over an inherited IRA that  normally is not allowed.   Say NO, it is not inherited to bypass the block."

I did not delete the 1099-R as you suggested, but I did set box 7 back to the reported code (4) and try your suggestion above.

It worked and gave the same correct results on the 1040 as the solution I posted in my last post.

So both solutions worked.  Thank you for that!  Good catch!

I would call this a TT bug since answering that it is an inherited IRA (which it is) yields a dead end.  TT currently has no support for rollovers of inherited IRAs under the CARES Act.