Why is Sect 1035 Distrib with 1099-R Box1 $33K Box 2 $0.00 and Box 7 as "6" showing as $33K as Retirement income? How to correct?

This is a Life to Life where Distribution of 33,039 was sent directly to the new insurer. I entered the info from the 1099-R as shown to

Box 1 Gross Distribution $33,039 Box 2 Taxable Amount $0.00

Box 2b Total Distribution Box 5 $24,808 and

Box 7 "6 - Section 1035 Exchange.

The entire $33,039 is included in my Retirement Income

What did I do wrong and how do I fix it?

459

1 Best answer

Level 15

Jun 4, 2019 6:07:03 PM

Look on the 1040 line 16. 16b (taxable amount) should be zero or blank.

The income summary screen will show the box 1 amount as income because it is income, but not taxable income.

Level 15

Jun 4, 2019 6:07:03 PM

Look on the 1040 line 16. 16b (taxable amount) should be zero or blank.

The income summary screen will show the box 1 amount as income because it is income, but not taxable income.