How to Correct Over Reported IRA Distribution

Forum|Forum|4 years ago
March 10, 2022
3 replies
24 views

In 2021 I wanted to consolidate all IRAs into a single brokerage and do a Roth Conversion.

On Sep 16, 2021 I requested a distribution of $33,000 from a Securities America traditional IRA. My plan was this convert money to a Fidelity Roth IRA. I requested a distribution instead of a rollover. Since I was going to deposit the money into a Roth IRA asked to have the check payable to “Fidelity Investment FBO [my name]”. As expected, I received a 1099-R from Securities America reporting the distribution as taxable.

Here is my problem:

I deposited the check into a Fidelity Traditional IRA, and then Fidelity moved that money into a Roth IRA. I received a 1099-R from Fidelity reporting the IRA conversion as taxable. So, the two 1099-Rs report $66,000 as taxable distributions, when only $33,000 was actually distributed.

I want to report $33,000 as a taxable distribution, but I expect the IRS will consider this under reporting. What is the best way to correct this?

Thank you,

John

Not A Product Question

Best answer by JulieS

No, if you follow the instructions that @Mike9241 gave above, the IRS will be able to tell what happened.

As shown in the previous post "...your 1040 box 4a would show $66K. there would be the word "ROLLOVER" $33K would show up in 4b as taxable."

The word ROLLOVER is the explanation for the IRS.

Mike9241

Level 15

assuming the check you got was put into the Fidelity IRA within 60 days, in TurboTax you have to go to the section to indicate it was a rollover to a traditional IRA

on your 1040 box 4a would show $66K. there would be the word "ROLLOVER"

$33K would show up in 4b as taxable.

Mike9241

Anonymous

Thanks for the instructions on how to handle this in Turbo Tax. My main question is about how to handle this with the IRS. Won't they see a discrepancy between what was reported as taxable income on the 1099-R and what I report on my tax returns?

Is there a way to explain this to the IRS, or file a correction to avoid them billing me for taxes owed, penalties, interest, etc?

Thanks