topic Entering 1099R info for Roth rollover from litigation check in Get your taxes done using TurboTax

Entering 1099R info for Roth rollover from litigation check

jsryan793 — Sat, 08 Feb 2025 16:34:05 GMT

There was a litigation settlement reached for mutual fund fee overpayment for $13.45 and a check was issued for $12.10 payable to my Roth IRA. I deposited that check in my Roth in August as a rollover deposit.

I received a 1099R for a $13.45 taxable distribution from my Roth IRA even though nothing was distributed from my Roth. Box 7 has code '7', 2b is checked 'Not Determined'. $1.35 Federal withholding.

I am using Forms, not the interview. When entering the 1099R info on page 2 line B4 is showing the $13.45 amount that may be rolled or converted. B5 does not apply as it was not a conversion. Where I am confused is line B6. It asks to enter the amount that was converted to a Roth. I do not see a line to enter the amount rolled over to a Roth.

The custodian is telling me they issued the 1099R correctly as a taxable distribution. I'm not sure I agree with that.

Where do I enter this as a rollover deposit?

Thanks....

Re: Entering 1099R info for Roth rollover from litigation check

SusanY1 — Sun, 16 Feb 2025 18:40:34 GMT

After you enter the 1099-R as issued, TurboTax will ask additional questions to determine the rollover status. You will be asked "What did you do with this money?". At this point in the interview select "[name] moved the money to another retirement account (or returned it to the same retirement account.)

This will allow the software to treat the amount properly as a roll over.

Re: Entering 1099R info for Roth rollover from litigation check

jsryan793 — Sun, 16 Feb 2025 21:04:48 GMT

Using that process places the $12.10 in line B2 as a traditional IRA rollover and shows $1.35 in line B4 as an amount that may be rolled or converted to a Roth IRA. Nothing shows up in line B6.

It also is flowing $1 to my F8606 as a traditional IRA conversion to my Roth in line 18.

I'm thinking more and more the 1099R was issued incorrectly as a taxable distribution. Perhaps it shouldn't have been issed at all.

Re: Entering 1099R info for Roth rollover from litigation check

jsryan793 — Mon, 17 Feb 2025 21:10:40 GMT

A bit more info.... This settlement distribution was issued from a Roth IRA closed in 2020. Since it was closed a check was issued payable to the Custodian FBO the Roth IRA. The closed IRA had not been opened for five years so I suspect that triggered the distribution as non-qualified and therefore taxable.

There is still a conflict though in the check being payable to the Roth and being taxable. Payable to the Roth is a rollover, I couldn't deposit it anywhere else.