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Level 1

Question

1099-R Distribution Codes

Forum|Forum|1 year ago
February 13, 2025
2 replies
6 views

I converted $125,000 from a traditional IRA directly to a Roth IRA. What should the appropriate distribution code be? My distribution code listed on the 1099-R is "7" which appears to be incorrect. TT is applying a 10% penalty since I was under 59 1/2 at the time of the transaction.

Level 15

after entering 1099-R, please CONTINUE to the interview that will address your issue.

Level 15

The code in box 7 is OK. When you answer the questions you see after you enter the Form 1099-R, you need to indicate that you moved the money to another retirement account, did a combination of rolling over, converting, or cashing out the money, and then enter the amount converted to a Roth IRA.

You also have to enter the value of your traditional IRA's at end of year:

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Level 15

Not only is code 7 OK, code 7 is the only correct code under these circumstances.