How to Correct Over Reported IRA Distribution

[Anonymous]

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

[Mike9241]

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.

[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

[JulieS · Accepted solution]

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.