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New Member
posted Feb 13, 2025 8:53:22 AM

1099-R Distribution Codes

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.

0 3 1922
3 Replies
Level 15
Feb 13, 2025 9:08:25 AM

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

 

@GGBENCE 

Expert Alumni
Feb 13, 2025 9:15:46 AM

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:

 

Level 15
Feb 13, 2025 10:15:46 AM

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