RMD as income when distributed to IRA

Forum|Forum|6 years ago
April 17, 2020
1 reply
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1099-R - My RMD was distributed in entirety to IRA.

1099-R as received and entered in Turbo Tax reads:

Box 1 and 2a same amount.

2b was checked Taxable amount not determined.

Box 4 Federal Tax was withheld.

Box 7 Distribution code is 7 with IRA/SEP/SIMPLE box checked.

Why is the entire RMD amount showing up as income when it was put into an IRA? Am I entering something wrong? Is the 1099-R correct?

TurboTax Home & Biz Windows

fanfare

Level 15

because they are two separate events.

If you made an IRA contribution then you need to be eligible for that contribution., otherwise you have an excess contribution.

You can't rollover RMD amounts

Record your contribution under "Deductions"

NMT204Author

Level 2

I understand that these are two separate events but the provision to cause the RMD to be used for the IRA Simple is provided for in the 1099-R, box 7 and the check box. The investment firm (large; won't mentioned name) caused this to happen. Entering again under "Deductions" seems like you would be entering it twice. Having the RMD appear as income when the money was not there for use (it went to the IRA) seems to be penalizing the taxpayer. If the IRS wanted it as two separate transactions why the opportunity to show the transfer on the 1099-R at all? Confusing!

Thanks for answering.