Received 1099-R annuity payment, Box 1 and 2a taxable amount same as 1, 'Taxable amount not determined' is checked-what does that mean. Box 7=7. Is this taxable?

[dianneb0910]

Box 1 and 2a same amount, but taxable amount not determined is checked? What does that mean?  Box 7=7

[dmertz · Accepted solution]

A 7 in box 7 means that it's a normal distribution made to someone age 59½ or older.

If the IRA/SEP/SIMPLE box is also marked (as is suggested by box 2a equaling box 1 and box 2b Taxable amount not determined being marked), this is a Form 1099-R for a distribution from a traditional IRA.  Your distributions from a traditional IRA are generally fully taxable unless you have made nondeductible contributions to your traditional IRAs, reported on a Form 8606 or some portion of the distribution is excludible from income as a result of you being over age 70½ and having made a Qualified Charitable Distribution, or if you made a one-time HSA Funding Distribution to fund an HSA contribution.

[dianneb0910]

Yes the IRA box is marked. Age under 70.  All taxable. Thanks

[dianneb0910]

Yes the IRA/SEP/SIMPLE box is marked. So this should be a distribution from a Traditional IRA?
You stated "unless you have made nondeductible contributions to your traditional IRAs, reported on a Form 8606"
How do I determine that?
Nondeductible contributions would be if after tax contributions?
If so, where do I get that information?
That would be nondeductible contributions do I have a basis to consider or ???

[dmertz]

Yes, the IRA/SEP/SIMPLE box being marked indicates that the distribution is from a traditional IRA.

Forms 1099-R for regular distributions from traditional IRAs are required to have box 2a equal to box 1 and box 2b Taxable amount not determined marked because the IRA custodian has no way to know whether you've made nondeductible contributions to traditional IRAs or not.  It's your responsibility to report your contribution either as a deduction on Form 1040 or Form 1040A or as a nondeductible contribution on Form 8606.  To see your basis in nondeductible traditional IRA contributions, you would need to look at your most recently filed Form 8606.  If you've never filed a Form 8606, presumably have no basis in nondeductible traditional IRA contributions (unless your IRAs acquired basis from after-tax money from a qualified retirement plan rolled over to a traditional IRA or by the transfer of basis to you with the IRA from a divorced or deceased spouse).  Chances are, if you don't already know about any basis in your traditional IRAs, you have none.

[dianneb0910]

Thank you

[giljnf83]

I still do not know if I need to pay taxes on this? I am 75 and will be 76 this year. Do I need to see a local tax consultant to get this answered? Gil

[dmertz]

Gil, if the Form 1099-R has an amount in box 2a and you have no reason to believe that that the taxable amount should be less, the amount in box 2a is the taxable amount that needs to be included on Form 1040 line 4b.

[chaso]

Need help along on this subject.  I have a IRA, distribution code 7 and 1 and 2a are the same, 2b Taxable amount not determined is checked.  All money in this IRA is post tax money so how do i get this info into TT.  Currently by cost basis is 11K but i am being taxed at 50k for what i took out.  Even if I enter 11K into box 3 it doesn't change my tax obligation.  It is still based on 50K. Help please

[chaso]

follow up - how do i find out if i have an 8606?  I don't recall one.

[dmertz]

"My basis is $11k" and "All the money in this IRA is post tax" seem to be contradictory statements if you made an $50k distribution.  With $11k of basis, no less than $39k of a $50k distribution will be taxable; more will be taxable if you have other money in traditional IRAs.

Your Form 1099-R is correct.  You must enter it exactly as received.  All of your traditional IRAs are considered to be a signal account for the purpose of determining the taxable amount of a distribution when you have basis in nondeductible contributions.  TurboTax automatically prepares Form 8606 when you enter the Form 1099-R and after clicking the Continue button on the Your 1099-R Entries page you enter your basis and your year-end balance in traditional IRAs.  The Form 8606 will be part of your printed tax return.

[chaso]

So I have this backwards.  Out of the 50k distribution only 11K was the growth.  Everything else I put in was after taxes.  Currently TT is calculating 50k for tax purposes.  I never get the option for an 8606 from TT?  I don’t believe I need to pay taxes on the 50k?  Help.

[dmertz]

TurboTax will automatically prepare Form 8606 when you enter the Form 1099-R and after clicking the Continue button on the Your 1099-R Entries page and you enter your basis and your year-end balance in traditional IRAs.

[chaso]

Thanks for the response.  That’s the issue, I never get the option to fill out the 8606?  I tried to jump to the form and it took me back to the 1099Rs.  I’ll keep working on it and check back later.  Tks