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 started an inherited IRA with the proceeds of the original IRA from my Mother.

Entering the 1099R as written will cause me to pay taxes on the total (as income) as well as when I take RMDs. This can't be correct.

[fanfare]

what is your Box 7 distribution code ?

[SweetieJean]

citation deleted

[dmertz]

SweetieJean, there are MANY inaccuracies and errors in the reference above.

[SweetieJean]

<a rel="nofollow" target="_blank" href="https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-beneficiary">https:...>

[fanfare · Accepted solution]

you can't start an inherited IRA, only preserve it. If you cashed out your mom's IRA, it is taxable income.

[guitarbruce]

Well, therein lies the problem. The bank that held the IRA was told I was transferring it to an Inherited IRA (which I now have) and sent me a check. I took the check directly to the financial adviser to start the new IRA. The IRA is now in effect entitled, IRA FBO (my name), B/O (my mother's name) Deceased.

[fanfare]

Your IRA  is titled correctly !
you will have to write an explanation letter to attach to your tax return explaining what happened. Include dates and amounts.
 Form 1040 Line 15a should be amount, and Line 15b should be zero.

[fanfare]

you could also ask the bank that held the IRA to issue a corrected 1099-R with a distribution amount of zero, but they may not be willing to do that.

[fanfare]

in the future if you want to move an inherited IRA, use a trustee-to-trustee transfer.

[guitarbruce]

Thank you for your response. Attaching a letter would require not using TurboTax for online filing. Is that your suggestion? For confirmation, Form 1040 Line 15a should be the total amount of the IRA and Line 15b would be zero? Would that be an overide of the TurboTax software?

[fanfare]

Use Code G instead of code 4 and taxable amount zero. You will still have to mail on paper if using TurboTax online.

[Critter]

If you leave box 2a blank and click on the "taxable amount not determined" you will get the option to indicate it was rolled over and you will be able to efile.   But keep good records so when the IRS notice comes around you will be ready for it if you can't get the trustee to correct the 1099-R.

[Rainman12]

Isn't there an interview question re: "Was any portion rolled over?", which would allow the 1099R to be entered as printed?

[fanfare]

Your problem is Code 4 which is not a Rollover. That is why the explanation will be necessary, If you attach it up front, IRS will probably not be bothering you later.