1099-R summary line 26c

[Lindalee0]

Line 26c is designated Roth contribution basis rolled to Roth IRA.  I noticed that line 5 of 1099-R feeds into this line.  I have been converting my 401k funds to Roth, where they then become designated Roth funds. I then roll out the funds to my Roth IRA from my designated Roth account.  From the time the funds are converted to when they are rolled out, the funds change in value due to market fluctuation. My designated Roth account administrator has been posting the original value immediately after conversion in box 5 of 1099-R and the value at roll-out in box 1, and box 7 is marked "H." In Turbotax 2020 as well as previous editions, line 26c feeds into the IRA Information Worksheet line 34. Then the value is added to line 23 to become line 51. I was wondering, for a roll-out from designated Roth to Roth IRA, where box H is marked, should the value of box 5=box 1 to reflect the value of the rolled out funds? In other words, does basis in this case mean value of tax free money rolling into Roth IRA.  The administrator was using the value at Roth conversion for box 5.

[macuser_22 · Accepted solution]

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@Lindalee0 wrote:

Line 26c is designated Roth contribution basis rolled to Roth IRA.  I noticed that line 5 of 1099-R feeds into this line.  I have been converting my 401k funds to Roth, where they then become designated Roth funds. I then roll out the funds to my Roth IRA from my designated Roth account.  From the time the funds are converted to when they are rolled out, the funds change in value due to market fluctuation. My designated Roth account administrator has been posting the original value immediately after conversion in box 5 of 1099-R and the value at roll-out in box 1, and box 7 is marked "H." In Turbotax 2020 as well as previous editions, line 26c feeds into the IRA Information Worksheet line 34. Then the value is added to line 23 to become line 51. I was wondering, for a roll-out from designated Roth to Roth IRA, where box H is marked, should the value of box 5=box 1 to reflect the value of the rolled out funds? In other words, does basis in this case mean value of tax free money rolling into Roth IRA.  The administrator was using the value at Roth conversion for box 5.

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No.  You do not report any change in value.     The 1099-R box 5 is your contributions.   It has nothing to do with value.  The box 1 amount is what was rolled over and box 2a should be zero (taxable amount).

If you are under age 59 1/2 and take a distribution  from the Roth IRA then the box 5 amount is what can be withdrawn tax free without any penalty (in additions to any other contributions that you have made to your Roth IRA).   Just keep track of your Roth IRA contributions and the box 5 amount for future use.

The IRA worksheet line 51 it the total "basis" in your Roth IRA that can be withdrawn penalty free if you are undedr age 59 1/2.   

[Lindalee0]

Thank you for clarifying that basis in box 5 is my original contribution and not a change in value and for clarifying that line 51 of the IRA information worksheet reflects total "basis" in my Roth IRA that can be withdrawn penalty free if I am under age 59 1/2.  Since I am over 59 1/2 and made a Roth IRA contribution more than 5 years ago, are all my Roth IRA distributions qualified, and is tracking basis a moot point for me?

[macuser_22 · Accepted solution]

If over age 59 1/2 and had owned any Roth IRS 5 years or more then yes,  all distributions are qualified and tracking basis is immaterial.