8606

[scottbfreeman]

I entered a conversion from a Traditional IRA to a Roth but an 8606 was not generated. How do I track down why this didn't happen and fix it?

Thanks

[scottbfreeman]

This response is not clarifying for me. Should it be linked to a post elsewhere?

Scott

[Anonymous_]

No. Contact Support if you don't get an answer here.

How do I contact TurboTax? (intuit.com)

[dmertz · Accepted solution]

It seems that you incorrectly entered the code 2 or code 7 Form 1099-R with the IRA/SEP/SIMPLE box marked.  Make sure that when entering this Form 1099-R that you indicate that you moved the money to another retirement account, that you did a combination of rolling over, converting and cashing out, then indicate that amount converted to Roth.

(If the Form 1099-R provided by the payer does not have the IRA/SEP/SIMPLE box marked, the transaction is not reportable on Form 8606.  Such a transaction would instead be properly described as a taxable rollover from the traditional account in an employer's qualified retirement plan, not a Roth conversion.)

[scottbfreeman]

Thanks for the reply. I have examined the 1099-Rs related to the movement of assets from a Traditional IRA to a Roth IRA. These forms were imported by TurboTax rather than hand entries. Box 7 of each uses Distribution Code 7 and the IRA/SEP/SIMPLE  box is checked. They were Conversions that created a tax liability :( . The Conversions that occurred in 2021 had the same entries for Box 7 and the IRA/SEP/SIMPLE  box yet an 8606 was generated for the 2021 tax year.

The instructions on the 8606 suggest to me that it should have been generated in that they state : You took distributions from a traditional, SEP, or SIMPLE IRA in 2021 and you made nondeductible contributions to a traditional IRA in 2021 or an earlier year.

It's not clear to me that this is an error in how Box 7 or the IRA/SEP/SIMPLE  box was entered since it was an imported entry and it still seems as though an 8606 should have been generated for the tax year 2022.

[dmertz · Accepted solution]

When you import a Form 1090-R you must go through the related questions in TurboTax to indicate what was done with the money.  You apparently did this correctly in 2021 TurboTax because the Form 8606 required to report the Roth conversion was generated but failed to do so correctly in 2022 TurboTax because no Form 8606 was generated.  For a code-7 Form 1099-R with the IRA/SEP/SIMPLE box marked, as long as you do not indicate that the entire distribution was an RMD (RMDs are not eligible for conversion), you properly indicate that you moved the money to another retirement account, that you did a combination of rolling over, converting and cashing out and you entered the amount converted to Roth, TurboTax will generate Form 8606.

(Because of the way that TurboTax asks the questions, it's not too uncommon for a user to indicate inappropriately that the amount was rolled over rather than converted.)