1099-R’s that are partly taxable are not handled properly

[Cliff_Thurber]

I have two 1099-R’s that are mostly non-taxable but partly taxable. I enter the proper information into TurboTax but TurboTax fails to compute the tax on the taxable portion, treating it all as non-taxable. Please fix this Intuit!!

I have been a TurboTax user all the way back to when it was Mac-in-Tax. This is the worst problem I have ever encountered.

PLEASE FIX THIS!

[dmertz]

Given correct entries, TurboTax will correctly determine the taxable amount of these distributions.

What is the code in box 7 of these Forms 1099-R?  Is the IRA/SEP/SIMPLE box marked?

If the IRA/SEP/SIMPLE box is not marked, is the taxable portion shown in box 2a of the Forms 1099-R?

If the IRA/SEP/SIMPLE box is marked, it would seem that you have not entered your year-end balance in traditional IRAs that is needed to prepare Form 8606 correctly.

[Cliff_Thurber]

Can you please tell me where to enter the year-end balances in IRAs? I can't find any clues.

[Cliff_Thurber]

In answer to these questions:

What is the code in box 7 of these Forms 1099-R? Is the IRA/SEP/SIMPLE box marked?

7, and IRA is checked.

If the IRA/SEP/SIMPLE box is not marked, is the taxable portion shown in box 2a of the Forms 1099-R?

Confusingly, the gross distribution value is also given as the taxable amount on line 2a, but the Taxable Amount Not Determined box is checked on line 2b. I asked the bank to send a correct 1099-R but they will not do that.

[Cliff_Thurber]

The answer apparently - IRA Info Wks.

[dmertz]

"Can you please tell me where to enter the year-end balances in IRAs? I can't find any clues."

TurboTax will ask for this after you click the Continue button on the page that lists the Forms 1099-R that you have entered and you indicate that you have basis in nondeductible traditional IRA contributions.  TurboTax will then place your entry on the IRA Information Worksheet.  Entering the amount on the IRA Information Worksheet in forms mode will accomplish the same thing.

[dmertz]

"the gross distribution value is also given as the taxable amount on line 2a, but the Taxable Amount Not Determined box is checked on line 2b."

This is 100% correct reporting by the bank.  The bank has no way to know your basis in nondeductible traditional IRA contributions, the IRS requires the bank to prepare the Form 1099-R this way.

[Cliff_Thurber]

I am finding the IRA Information Worksheet to be really confusing. I also have no idea where I enter the redeposited amount so I don't get taxed on it.

[dmertz]

This is the first post that you've made mentioning a "redeposit."  It seems that you are referring to what is called a rollover.  When entering the Form 1099-R, TurboTax will ask what you did with the funds and when you indicate that some or all of the distribution was rolled over, TurboTax will ask the amount that was rolled over and will exclude that amount from the taxable amount that would otherwise be included on Form 1040 line 4b or 5b.