turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
Close icon
Do you have a TurboTax Online account?

We'll help you get started or pick up where you left off.

Connect with an expert
x
Do you have an Intuit account?

Do you have an Intuit account?

You'll need to sign in or create an account to connect with an expert.

dmertz
Level 15

Received a 1099R for an IRA I inherited and transfered to an inherited IRA. Box 2 and 2a both have the total amount? Should 2a have anything other than 0?

A written explanation won't help.  A distribution paid to a non-spouse beneficiary, reported with code 4, is not permitted to be rolled over.  TurboTax won't ask the question under these circumstances.

Code G only applies to rollovers to or from a qualified retirement plan like a 401(k).

Was the check that you received and subsequently provided to the new inherited IRA custodian made out to you or was it made out to the receiving IRA?

Received a 1099R for an IRA I inherited and transfered to an inherited IRA. Box 2 and 2a both have the total amount? Should 2a have anything other than 0?

Ohh ... dmertz is correct ... it had to be a trustee to trustee transfer or the check had to be in the name of the new account for the transfer to be recognized.
dmertz
Level 15

Received a 1099R for an IRA I inherited and transfered to an inherited IRA. Box 2 and 2a both have the total amount? Should 2a have anything other than 0?

A trustee-to-trustee transfer is not a rollover.  No rollover is permitted.

Received a 1099R for an IRA I inherited and transfered to an inherited IRA. Box 2 and 2a both have the total amount? Should 2a have anything other than 0?

how did the account get titled correctly then?

Received a 1099R for an IRA I inherited and transfered to an inherited IRA. Box 2 and 2a both have the total amount? Should 2a have anything other than 0?

do not put any amount on Line 15. Still file with an explanation.
dmertz
Level 15

Received a 1099R for an IRA I inherited and transfered to an inherited IRA. Box 2 and 2a both have the total amount? Should 2a have anything other than 0?

How an IRA gets titled depends on the purpose for which it was opened, not how it is subsequently funded.  At issue is how it was funded.  According to the code 4 Form 1099-R, it was funded illegally.

What needs to be determined is whether the funding was done legally and the code 4 Form 1099-R was issued erroneously, or if the code 4 Form 1099-R is correct and the new inherited IRA account was funded illegally.  That depends *entirely* on the payee shown on the check.

Received a 1099R for an IRA I inherited and transfered to an inherited IRA. Box 2 and 2a both have the total amount? Should 2a have anything other than 0?

receiving custodian should not have accepted inappropriate funds since contributions are not permitted.
Check must have been correct..
dmertz
Level 15

Received a 1099R for an IRA I inherited and transfered to an inherited IRA. Box 2 and 2a both have the total amount? Should 2a have anything other than 0?

One cannot assume.

Received a 1099R for an IRA I inherited and transfered to an inherited IRA. Box 2 and 2a both have the total amount? Should 2a have anything other than 0?

Unfortunately, it appears the receiving trustee erred in accepting the funds as a legitimate transfer. I now have to figure out how to resolve this fiasco of an illigitimate IRA.
dmertz
Level 15

Received a 1099R for an IRA I inherited and transfered to an inherited IRA. Box 2 and 2a both have the total amount? Should 2a have anything other than 0?

guitarbruce, I interpret this to mean that the check was made out to you personally, negotiable by you, and the code 4 Form 1099-R is correct in implying that you received a distribution that was not eligible for rollover.

In various letter rulings involving situations where an amount not eligible to be rolled over to an IRA was deposited in an IRA, the IRS has invariably considered the amount deposited to be an excess contribution subject to penalty unless a return of the contribution is made by the due date of the tax return.  Assuming that the Form 1099-R in this case is a 2016 Form 1099-R, if you filed your 2016 Form 1099-R or requested a filing extension by April 18, 2017, the deadline to make the return of contribution before the due date of your tax return is October 16, 2017.

Contact the receiving trustee about making a return of contribution.  I suspect that the receiving trustee inappropriately treated this as a trustee-to-trustee transfer (which it would have been had the check been made out to your receiving IRA account).  Check your Form 5498 from the receiving IRA to see if it reports any amount in box 2; if not, they indeed have treated it as a trustee-to-trustee transfer even though it was not and before they will consider making a return of contribution they will need to be convinced that an excess contribution exists.

Received a 1099R for an IRA I inherited and transfered to an inherited IRA. Box 2 and 2a both have the total amount? Should 2a have anything other than 0?

I highly suggest talking to a tax attorney for guidance ... if the bank acted incorrectly you may have a case against them so you could recoup any costs ... that is what E&O insurance is all about.
dmertz
Level 15

Received a 1099R for an IRA I inherited and transfered to an inherited IRA. Box 2 and 2a both have the total amount? Should 2a have anything other than 0?

I believe that Critter#2 is referring to the trustee that held your mother's IRA.  If you requested a trustee-to-trustee transfer an they instead made a distribution, they have cost you the opportunity to stretch out the distributions.

Received a 1099R for an IRA I inherited and transfered to an inherited IRA. Box 2 and 2a both have the total amount? Should 2a have anything other than 0?

Both trustees on both sides of this transaction may have made a mistake or failed to educate you ... seek assistance to see where you stand legally.

Received a 1099R for an IRA I inherited and transfered to an inherited IRA. Box 2 and 2a both have the total amount? Should 2a have anything other than 0?

Thank you all for your good advice. Based on that advice and what I've read on the IRS documents, I have an illegitimate Inherited IRA. I've called the company that created the illegitmate Inherited IRA for me and we're looking at options for terminating it as if it never existed. I'm partly at fault because I didn't ask more questions regarding my options at the time my mother's IRA was being dissovled among the family members.

Lesson learned.

Unfortunately I've got no more parents to use this lesson on.
dmertz
Level 15

Received a 1099R for an IRA I inherited and transfered to an inherited IRA. Box 2 and 2a both have the total amount? Should 2a have anything other than 0?

If the new account was created in 2016, It's going to be difficult to treat the account as if it never existed since a 2016 Form 5498 attesting to its existence would already have been sent to the IRS.
message box icon

Get more help

Ask questions and learn more about your taxes and finances.

Post your Question
Manage cookies