Entering 1099-R information correctly into TT

[HR67]

Hello,

In 2024, I rolled an employer-sponsored 401(k) to IRA. There were 2 components in the 401(k) (i) a pre-tax amount that went entirely to a Traditional IRA; and (ii) an after-tax amount that rolled into a Roth IRA. Now, the financial institution has only sent me a single 1099-R form.

Box 1 Gross Distr. has the total amount (lumped together), Box 2 Taxable amount is $0.00, Box 7 has "G" and Box 5 has the after-tax amount corresponding to what went into the Roth IRA. There is no Roth conversion going on and I am not withdrawing anything. So there should be no tax impact. 

How is this supposed to be handled in TT? I've seen various posts asking to split the 1099-R into 2 and entering separately in TT. Is this the correct way? And should I use code "G" for Box 5 in both 1099-Rs ? .

Thanks in advance to the TT community for any advice. 

HR

[baldietax]

Congrats on achieving the so-called "mega-backdoor Roth conversion".

I had this in 2023 and entered the 1099-R as is.  I couldn't recall any issues so I brought it back up in TT 2023 (desktop version) and it does seem easy for TT to get confused on the interview questions after the 1099-R, if you say "yes" to question about whether this money was rolled over to a Roth (which is partially true), it seems to assume it was all converted and your taxes go beserk.

If you just say "no" to that question you should get the right outcome, Form 1040 will show the entire rollover on line 5a and $0 for tax in Line 5b.

In Forms mode in the 1099-R there is a section "B" at the bottom for Rollovers, Roth Conversions, Roth Rollovers and Recharacterizations.  That EasyStep "yes" response above puts an X in line B5 indicating the entire amount was converted.  So I would keep eye on that section all makes sense and you get the right outcome on Form 1040.

Not a CPA/Expert, just sharing how I handled it - and based on desktop version in 2023, not sure about 2024/online.