TSP to Roth IRA Conversion Question

[albertlin]

My mother took her required TSP RMD in 2023 which we reported as income for 2023 easily in TurboTax 2023. However, we also took out an extra $7500 from her TSP, which she received a check for (made out to Vanguard) which she immediately sent within 60 days to Vanguard to convert to a Roth IRA. As I understand, this counts as a CONVERSION, and not a ROLLOVER or CONTRIBUTION, because it was initially a pretax TSP contribution which is now being CONVERTED to a Roth IRA, which is a taxable event. But I am unclear where we should document this in Turbo Tax 2023 Deluxe? I'm having trouble finding out how to document this, as this seems a bit different from backdoor Roth IRAs, which I have done before.

[dmertz · Accepted solution]

Presumably the Form 1099-R for the $7,500 rollover has code G in box 7 and $7,500 in both boxes 1 and 2a.  Enter this Form 1099-R in the same section as the one reporting the RMD distribution.  Answer No to the question asking if the rollover was to a Roth 401(k), Roth 403(b) or Roth 457(b).  Answer Yes to the question asking if the rollover was to a Roth IRA.  TurboTax will include the $7,500 on line 5b with the rollover notation and will add it to 2023 taxable conversion basis on the IRA Information Worksheet.

(If the code-G Form 1099-R has a zero of blank box 2a, it means that the TSP was told that the rollover to to be to a traditional IRA, not to a Roth IRA, and your mother diverted the funds to a Roth IRA, which will require entering a substitute Form 1099-R (Form 4852),  changing the amount in box 2a to $7,500 with explanation.)