I rolled over part of my 401K to a rollover IRA in early 2023. The rollover of company stocks for that rollover went through a custodian (Computershare) before being deposited into my Rollover IRA account. The company paid dividends in that short window while the shares were with Computershare. Computershare in turn mailed me a dividend check for these which I promptly deposited into my Rollover IRA. Computershare issued me a 1099-DIV for those even though I had notified them and provided documentation that they were rolled over into an IRA. They acknowledge that the rollover should not be taxed but are unwilling to correct the 1099-DIV and referred me to the Rollover IRA financial institution who in turn referred me back to them!! How do I correctly report this in Turbotax so it is treated as the non-taxable rollover it was? Thanks
Did the new custodian know you were doing a 60-day rollover deposit?
The first custodian should give you a 1099-R not a 1099-DIV
They did know that I was doing a 60 day deposit into a rollover IRA but insist that either the financial institution for my rollover IRA correct this or I figure out a form to fill out to notify the IRS!
If you report the 1099-DIV as "nominee distribution" i.e. belonging to someone else,
TurboTax should put a negative amount on Schedule B to cancel the amount.
Thank you. I had tried that but was not sure if it was allowed. I called the custodian and financial institution again and each referred me to the other again so the option you mention is likely my only path forward.
I have the exact same issue this tax year 2024. Can you tell me what was the resolution?
You should enter the 1099-DIV form and on the screen that says Do these uncommon situations apply? Choose the I need to adjust these dividends option.
On the next screen you can choose the Other adjustment, including restricted stock dividends reported on Form W-2 option and then on the next screen you can enter the dividend amount as an adjustment to cancel out the dividend income.