This year I did a traditional IRA conversation to a Roth. I received a 1099-R with a distribution code of 02. Why is this showing as taxable income?

[IreneS]

Just in case you are doing a "Back Door" Roth, I added the instructions to my original answer.

[IreneS]

Your traditional IRA is funded with pre-tax dollars -- you did not pay taxes on the money going into the IRA.  The contribution was either taken out of your paycheck before taxes were calculated OR you got a tax deduction on your return.

Roth IRAs are funded with after-tax dollars, so that you have to pay taxes on the money before it goes into the Roth IRA.  The good news is that distributions from the Roth (including earnings) are free of tax. 

The Roth IRA must have been established for at least five years before funds can be withdrawn.  If the withdrawal is made before age 59½ and doesn't exceed the amount that has been contributed to the Roth IRA over the years, then no income tax is charged.

If you are doing a "Back-Door Roth IRA" conversion  please follow the steps in this FAQ:

https://ttlc.intuit.com/replies/6768029

[EDITED 4/1/2019 | 9:22 am PDT]