topic 1099R - Roll over inherited 401K to IRA shows as taxable income in desk top version. in Retirement tax questions

1099R - Roll over inherited 401K to IRA shows as taxable income in desk top version.

dicarnes1956 — Mon, 23 Feb 2026 13:26:58 GMT

I have read the posts about this problem in the past and they say that the question asking what did you do with the money is supposed to pop up, but it doesn't. I rolled over the money and then later cashed it out for medical expenses, but Turbo Tax is reporting them both as income. I am using Turbotax 2022. I would think you would have this problem fixed by now. Is there a way around this problem? I would appreciate some help here. It is very frustrating. Thank you in advance

Re: 1099R - Roll over inherited 401K to IRA shows as taxable income in desk top version.

dmertz — Sat, 04 Feb 2023 00:24:19 GMT

Are you the surviving spouse of the decedent?

What is the code in box 7 of the Form 1099-R provided by the payer?

Re: 1099R - Roll over inherited 401K to IRA shows as taxable income in desk top version.

dicarnes1956 — Mon, 06 Feb 2023 07:11:29 GMT

Yes and 0

Re: 1099R - Roll over inherited 401K to IRA shows as taxable income in desk top version.

dmertz — Mon, 06 Feb 2023 13:05:32 GMT

The code in box 7 can't be 0, 0 is not a code. It's probably code 4.

When entering a code-4 Form 1099-R you must indicate that you are the surviving spouse of the decedent. TurboTax will then allow you to indicate that you rolled the money over to an IRA.

Note that this rollover represents nontaxable income. TurboTax's summary page shows both taxable and nontaxable income, so you must look at Form 1040 line 5b to see the taxable amount of this rollover.