1099-R Rollover - Distribution Code G - Showing a Taxable Amount

[cjbaz]

Good day, 

I received a 1099-R form for with the following selected ; XXXX Gross Distribution & Taxable Amount being the same, Total Distribution Selected, and a Distribution of Code of G. 

This creates a large tax liability which again I feel is made in error. I placed a direct rollover to my new institution which, was made directly to them in FBO of my name. 

I believe a distribution code of G is a non taxable event is that correct? 

I have already emailed and spoke to the previous institution and they are giving me a hard time about sending a correction to the 1099-R. 

[VolvoGirl]

Yes code G is a direct transfer and not taxable.  What kind of account did you put it in?  Was it to a ROTH?  Go back and delete the 1099R and enter it again manually.  You must have answered a follow up question wrong.  Did you check the actual 1040 return?  Line  4b or 5b should be 0 and say Rollover by it.   If you are just looking at a review or summary screen it will show it all as income so you have to check the actual return.  

Before filing you can preview the 1040 or print the whole return
https://ttlc.intuit.com/community/accessing/help/how-do-i-preview-my-turbotax-online-return-before-f...

[dmertz]

This code-G Form 1099-R implies that you told the plan to roll the distribution from the traditional account in your 401(k) directly to the designated Roth account in the same plan (apparently not the case here since the money went to a different financial institution) or to a Roth IRA.  Such direct rollovers are taxable.  If you told the plan to make the rollover to a traditional IRA or to the traditional account in another employer's plan and actually deposited the funds into one of these types of traditional accounts, the plan needs to correct the Form 1099-R to remove the taxable amount.

If you told the plan to do a rollover to a Roth account but instead deposited the money into a traditional account, the Form 1099-R will not reflect that you diverted the funds to a traditional account.  Since that's not an error made by the plan, they won't modify the Form 1099-R.  Instead you'll need to create a substitute Form 1099-R (Form 4852) in TurboTax where you can explain to the IRS what you did to divert the funds.

[VolvoGirl]

@dmertz  Did you post this on the wrong question?  Like this one?

https://ttlc.intuit.com/community/taxes/discussion/how-do-i-report-converting-money-from-traditional... 

[dmertz]

Direct rollovers reported with code G in box 7 can be either nontaxable or taxable depending on the type of account that receives the rollover.  A taxable amount in box 2a of a code G Form 1099-R reports a taxable rollover from a traditional account in the plan to some kind of Roth account.

[VolvoGirl]

Awwww....

[MikeM-Denver]

Trying to figure this out as the 1099-R I received from my Financial firm has a G in box 7 but my turbotax summary is showing it as income.  I performed an IRA 401k Rollover from Firm A to an IRA Rollover account(new account) at Firm B.

I did not receive any funds at any time during the transaction.  Do I need to do a Form 4852 and if so do I delete the 1099-R that is causing this anomaly?  Thanks

[MarilynG1]

No, you don't need to delete your 1099-R entry, but you may want to double-check your entries (and the follow up questions).   Your Code G indicates the distribution as non-taxable, so there is something else triggering the taxability.  Is there a second code on your 1099-R? 

If you're using TurboTax Online, you could close the program, clear your Cache and Cookies, re-open (maybe try a different browser), and return to the 1099-R section.

You won't need to prepare any forms yourself; TurboTax will prepare them if needed. 

Here's more info on How to Enter 1099-R and  Box 7 Codes on Form 1099-R. 

@MikeM-Denver 

[MikeM-Denver]

MarilynG1,

There are no other codes on the form.  1.= gross dist which is full amount of 401k transfer. 2.= 0.00 taxable amount.  IRA/SEP/Simple box is blank so question 1 is NO,  Rollover from 401k to Roth =NO,  Was this money rolled over to Roth IRA =- NO,  Safety Officer = NO, Qualified disaster = NO..

That's how all is entered. I downloaded Turbo on my PC and am running it from there.  Also click download updates when opening.   Really think this is screwing my income up.  Mike

[MikeM-Denver]

MarilynG1, 

So I decided to delete the 1099-R in question and my FED refund did not change.  So besides the Turbo Summary showing this as income it did not affect my running refund.   Interesting.  So ignore and move on?

[dmertz]

Enter the Form 1099-R and ignore the summary.  The summary is correct, but is subject to misinterpretation.

[MikeM-Denver]

thinking this is the case.... confusing but does not seem to be making all income listed as taxable.  Mike

[VolvoGirl]

If you are looking at a summary screen or review screen those show the full amount as income and lump a lot of stuff together. You need to check the actual 1040 form and make sure it's right. Check lines 4b & 5b for any taxable amounts. For a rollover line b should be zero and the word Rollover by it.

If you have the Desktop program you can switch to FORMS in the upper right and open the 1040 and see.  A 401k should be on line 5a and zero taxable on 5b.  

[MikeM-Denver]

4a and 4b are blank. 5a has the total dollar amount moved to firm B and 5b says Rollover.  Does that sound correct?

[MikeM-Denver]

Another observation doesn't make sense.  I had 3 1099-R's this year.  Two are pension plan distributions and the third being the rollover that we are discussing.  Turbo is adding these all together for my 5a entry showing a rollover amount higher than the fund which was actually moved.  So my 5a is greater than my actual rollover amount.  That is misleading as well.  Pension plans are monthly payouts not rollovers.  This is not making sense.