1099-R distrubution/rollover

[edc0855]

I received 2 different 1099-R forms from taking my IRAs out of one bank and moving them to a credit union. I entered them into TT as directed, they show as earnings when they are actually a rollover with no distrubution.

I entered code 7 in the first window and code G in the second, is this correct?

[Critter-3]

After you enter the 1099-R forms complete the following screens in that section to indicate the amount rolled over then check the ACTUAL tax forms to see the amount rolled over ... don't stop at the summary screen which only shows the total distribution not just the taxable portion.  

[dmertz · Accepted solution]

These are "income" in the sense that they must be reported on your tax return, but TurboTax excludes the amount rolled over from the taxable amount shown on your tax return.

[edc0855]

what "ACTUAL " tax forms are you referencing?

[Critter-3]

The form 1040 and the rest ... don't stop at the summary screens since they can be misleading and/or confusing. 

How do I preview my TurboTax Online return before filing?

You can view your entire return or just your 1040 form before you e-file:

1. Open or continue your return.
2. Select Tax Tools in the left menu (if you don't see this, select the menu icon in the upper-left corner).
3. With the Tax Tools menu open, you can then:
• Preview your entire return: Select Print Center and then Print, Save, or Preview This Year's Return (you may be asked to register or pay first).
• View only your 1040 form: Select Tools. Next, select View Tax Summary in the pop-up, then Preview my 1040 in the left menu.

[jdkeith4]

I have already submitted my tax return to TT electronally, since then I received a 1099R for a rollover. There is $0 tax liability. Do I needed to amend by Tax return after it is accepted by the IRS? Or wait to see how its handled by the IRS. This is the first time I have ever seen a 1099R for any of my rollovers.

[dmertz]

jdkeith, depending on the nature of this rollover, the IRS might question it, but you'll want to wait for the IRS to process your filed tax return before doing anything.

1.  What is the code in box 7 of this Form 1099-R?
2.  Is the IRA/SEP/SIMPLE box marked?
3.  Does box 2a contain a zero?
4.  Is box 2b Taxable amount not determined marked?

The reason that you never received a Form 1099-R for past "rollovers" is that they were likely not distributions and rollovers at all.  Trustee-to-trustee transfers of IRAs where the funds are never paid to you in between are neither a distribution nor a rollover so they are not reportable.

[jdkeith4]

The rollover was Trustee to Trustee was not made out to us. I think the 1099R was issued in error.

[jdkeith4]

1. Code in box 7 is G.

2. IRA/SEP/SIMPLE Box is Blank

3. Box 2a is a zero

4. Box 2b is blank

[dmertz]

This Form 1099-R shows a nontaxable direct rollover from a qualified retirement plan.  If this rollover was to an IRA, the IRA custodian will issue a Form 5498 reporting the receipt of a rollover contribution, so even if the IRA Automated Underreporting System flags the omission of the gross amount from Form 1040 line 5a, the examiner should recognize that the rollover was completed an not issue to you any notice of underreported income.  However, some examiners are better than others, so they might question this rollover.

If the rollover was to another qualified retirement plan, no reporting of the receipt of the rollover is made to the IRS by the plan administrator.  Even if the gross amount was present on line 5a, since such a rollover is less common than one to an IRA, the IRS often questions the completion of the rollover unless you included an explanation statement attesting to the fact that the rollover was completed to another qualified retirement plan.

In any case, it's probably not necessary to amend, but be prepared to provide supporting documentation to the IRS showing that the rollover was actually completed in case the IRS has any questions about this transaction.

[Baronfoer]

I got the 1099R but it doesn't show the reinvested rollover which I did less than 60 days later. Is the 5498 what I should ask for showing the reinvested (rollover) amount?

[dmertz]

There is no need for you to have received Form 5498 before filing your tax return.  Form 5498 reports to the IRS what you should already know from the account statements and transaction records for an IRA that received the rollover.  Forms 5498 are often not generated by the IRA custodian until after the regular filing deadline for your tax return.  The custodian isn't going to send you the Form 5498 any earlier just because you ask for it.

[jdkeith4]

The form I received was a 1099R not a 5498. It had the amount of the rollover in box 1 and zero amount for taxes in Box 2.

[Critter-3]

ALL 1099-R forms MUST be entered in the program and on the return EVEN IF  none of it will be taxable ... failure to do so will get you an IRS audit letter later that you will have to deal with.  

[jdkeith4]

That would have been simple enough if I had received the 1099-R before I submitted my 1044 tax return. I am considering if it is necessary to amend my return. The original 401 Trustee should have issued a 5498 to the IRS. This was a Trustee to Trustee rollover, I never received the funds. The amend return will not change the tax liability.