Turbo Tax 2025 indirect rollover and RMD handling

[Pugetwatch]

I performed an indirect IRA rollover from Institution (Ins) A to Ins B. (Ins B could not/would not accommodate a direct rollover.) I deposited the check at Ins B within 2 weeks of receiving the Ins A check (within the 60 day window), minus the RMD, which I deposited to an Ins B savings account. As it was, Ins A sent me a 1099-R which reflected a total distribution and Ins B sent a 1099-R which showed a distribution of the RMD amount. The TurboTax interview has a field to fill in which reads, "RMD due by Dec. 31, 2025 ___________" for each 1099-R. I entered the amount of the required RMD on the entry for Ins A (since that was calculated based on the balance in that account as of Dec 31, 2024) and $0 on the entry for Ins B. Neither of these 1099-R interview sections asked the questions regarding distribution - full or partial, etc. Is there a way to reflect how the funds from Ins A were distributed in the event the IRS doesn't recognize that this was a rollover?

[dmertz]

"Neither of these 1099-R interview sections asked the questions regarding distribution"

This seems implausible.  For a Form 1099-R with code 7 in box 7 and the IRA/SEP/SIMPLE box marked, TurboTax will ask if you moved any of the money to another retirement account.  For the Form 1099-R from Ins A, after entering the amount of RMD required and subsequently entering the amount of this distribution that was RMD, TurboTax will ask if you moved any of the money to another retirement account.  Indicating that you did causes TurboTax to allow you to indicate that some of the distribution was rolled over.

For the the distribution from Ins B where you indicated that the required RMD was zero, TurboTax will move straight to asking if you move any of the money to another retirement account.  (In this case your answer would have to be that you converted some or all of it to Roth or that you did not roll over or convert any of this money.  An ordinary rollover of this distribution to another traditional IRA would be a violation of the one-rollover-per-12-month-period limitation.)

[dmertz]

One other thought:  If the IRA at Ins A was an inherited IRA (code 4 in box 7 of the Form 1099-R) and you are a non-spouse beneficiary, the distribution was not eligible for rollover and the deposit into Ins B is an excess contribution subject to penalty unless timely corrected.  Because such a distribution is ineligible for rollover, TurboTax will not ask what you did with the money.