topic Correct code for Box 7 of 1099r for Roth IRA distribution to new Roth IRA in Retirement tax questions

Correct code for Box 7 of 1099r for Roth IRA distribution to new Roth IRA

Vernaf7449 — Tue, 09 Jul 2019 10:24:52 GMT

In 2017 I took a distribution from a Roth IRA account, and within 10 days it was used to open another Roth IRA account (the money was directly transferred I never touched it). None of that distribution was taxable.

During the process the original Roth IRA was mis-classified as a Traditional IRA so I got a incorrect 1099r for tax year 2017, that was not noticed before I filed my taxes. I need to correct it now since the IRS caught up with it.

I have contacted my financial institution, they did identify the error in the paperwork from 2017 and will send me a corrected 1099r.

What is the correct code for Box 7 of the 1099R, for this situation? The original (wrong) 1099r had Code 7 and the box indicating it was a Traditional IRA was checked off. Was a 1099r even needed? Is there another tax form I need? I have my account statements I will also send to the IRS.

Re: Correct code for Box 7 of 1099r for Roth IRA distribution to new Roth IRA

dmertz — Tue, 09 Jul 2019 12:15:04 GMT

If a distribution was paid to you, not made payable directly to the new Roth IRA for your benefit, a Form 1099-R is required. If made payable to another Roth IRA directly, it would instead be a trustee-to-trustee transfer which is not reportable.

A regular distribution from a Roth IRA would be reported on Form 1099-R would be reported on Form 1099-R with either code J, T or Q depending on your age, and how long you had the Roth IRA. Since the incorrect Form 1099-R had code 7, presumably you are over age 59½, so a distribution from a Roth IRA would be coded with T unless you had the Roth IRA account before 2014 in this case and would instead have code Q.

With the books at the original financial institution corrected to show the original account as a Roth IRA, a corrected code 7 Form 1099-R will be needed showing that $0 was distributed from a traditional IRA.

Re: Correct code for Box 7 of 1099r for Roth IRA distribution to new Roth IRA

Vernaf7449 — Tue, 09 Jul 2019 13:23:38 GMT

Thanks. I just got the corrected 1099r and they have $0 distribution from a traditional IRA