Taxable amount on 1099-R distribution

[dmertz]

@Aloneintheworld , a Form 1099-R with code 7 in box 7 and the IRA/SEP/SIMPLE box marked is required by the IRS to have the same amount in box 2a as is in box 1 and box 2b Taxable amount not determined marked.  For this reason, TurboTax properly ignores the amount shown in box 2a.  You must enter this Form 1099-R exactly as provided by the payer.

The only reason that the taxable amount of this distribution could be less than the full gross amount of the distribution is if you have basis in nondeductible traditional IRA contributions and the taxable amount must be determined through calculations on Form 8606.  If you have made a nondeductible traditional IRA contribution for 2022, you must enter that contribution under Deductions & Credits before TurboTax will have that information to include on Form 8606.  If you have basis in nondeductible traditional IRA contributions shown on a previous year's From 8606, you must click the Continue button on the page that lists the Forms 1099-R that you have entered and, when TurboTax asks, indicate that you made nondeductible traditional IRA contributions in a prior year and then enter the amount.  After TurboTax prepares Form 8606, TurboTax will include the full gross amount on Form 1040 line 4a but will include only the taxable amount on line 4b.

If you have rolled over into your traditional IRAs any after-tax basis from an employer plan and have not previously reported that on Form 8606, you must click the EasyGuide button in this section, mark the box to indicate that you rolled over funds from an employer plan and then enter the amount of after-tax basis rolled over from the employer plan.  TurboTax will then prompt you to provide the required explanation for this adjustment to your basis in nondeductible traditional IRA contributions.

[Aloneintheworld]

Thank you John,

What I am seeing is on my 1040 SR is box 4a IRA distribution is blank and box 4b Taxable  amount has the amount from box 1 of my 1099 not the taxable amount in box 2a.  It has been suggested that I delete the 1099 form in my taxes and start over.  Other than that I am at a loss. 

[dmertz]

@Aloneintheworld , you have not said why you believe that any of this distribution should be nontaxable.  The only reasons that a portion of this distribution would be nontaxable is if you rolled over that portion to another traditional retirement account or if you have basis in nondeductible traditional IRA contributions.  Either way, TurboTax has to calculate the nontaxable amount from your entries, you cannot calculate the nontaxable amount yourself outside of TurboTax.

[EmptyWallet]

I am seeing the same/similar problem. I have two 1099-R forms. Both are from rollovers from 401(k) to an IRA, all of the funds were rolled over. One has a Gross Distribution amount, box 2a Taxable amount is 0.0, Check Box 2b Total Distribution is selected, and Box 7 is G-Direct rollover. The other 1099-R has a Gross Distribution amount, Box 2a has a Taxable amount (to effect a change of basis), Box 6 has a Net unrealized appreciation amount, and Box 7 is 7-Simple distribution. 

The 1099R Summary form shows Gross (on Line 22) that is correctly the sum from the two 1099-R forms. Line 25 lists that same amount. Line 26 incorrectly lists Taxable amount in box 2a as the sum of the Gross distribution value from the first 1099-R form and the Taxable amount from the second 1099-R form (rather than the sum of the Taxable amounts listed in box 2a of the 1099-R forms).  But then the Taxable amount transferred to Form 1040, line 5b, listed on line 32d is 0.00. Line 5a of Form 1040 shows the sum of Box 1 from the two 1099-R forms (as expected), but Line 5b of Form 1040 shows 0.00 (I expected to see the Taxable amount from box 2a of the 1099-R form). As a result, TurboTax is calculating the taxes incorrectly because it isn't including that Taxable amount. Note that after inputting the 1099-R there is a question 'What did you do with the money from Company X?'. If I select the option that I moved the money to another retirement account (which is what I did), the errors described above occur; if I select the option that I 'did something else (cashed out, etc.)' - which is not what I did with the money, the errors described above go away, and I appear to get the correct results. But I don't have a high degree of confidence in the results, because it seems that if I answer that question correctly I get wrong results, but if I answer it incorrectly I appear to get correct results.

[dmertz]

@EmptyWallet , $0 taxable on Form 1040 line 5b is correct because, as you said, all amounts were rolled over to a traditional IRA.  The cost basis of the NUA shares is only taxable only if the shares are not rolled over to a traditional IRA.  Now that the NUA shares have been rolled over, the shares are no longer subject to NUA treatment.  Rolling over the NUA shares does not create basis in nondeductible traditional IRA contributions in your traditional IRAs.