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thinktax
Returning Member

1099-R requiring amending 2019 return

In Feb 2020, I got ETrade to rollover $5000 from my traditional IRA to my Roth IRA. Rather than doing a rollover they did a recharacterization. On my brokerage statements I can see it listed as "recharacter" for $4975.32 after deducting $25 IRA characterization fee. I received a 1099-R from Etrade for 2020 for $4975.32 with code 'R'. When I enter the 1099-R into Turbotax, I am told that I need to amend my 2019 return. I have also received a 5498 for the year 2020 for the same amount of $4975.32. Do I have to still file an amended 2019 return or can I use the 5498 to indicate that this is just a transfer of funds from Traditional IRA to Roth IRA? I am hoping there is a simple fix to this than amending returns.

4 Replies
Nick-K-EA
Employee Tax Expert

1099-R requiring amending 2019 return

Unfortunately, a recharacterization is not the same thing as a rollover. Here's a short article which explains the difference. Once you understand that, it will be clear why you must amend your 2019 return.

 

https://thefinancebuff.com/traditional-and-roth-ira-recharacterize-vs-convert.html

Nick K, EA
thinktax
Returning Member

1099-R requiring amending 2019 return

Thank you for the reply. 1099-R is got has the year 2020. What do I amend in my 2019 return?

fanfare
Level 15

1099-R requiring amending 2019 return

@thinktax 

Is the $5,000 money you had contributed earlier in 2019?
Whether you amend depends on whether you took an IRA deduction on your 2019 return, or filed 2019  Form 8606 for non-deductible, which would also be wrong.

 

E-Trade messed you up by not following your instructions.

 

 

 

thinktax
Returning Member

1099-R requiring amending 2019 return

 

@fanfare Yes, the $5000 contribution was in 2019.

I did not take deduction on my 2019 return.

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