Question on Reporting After-Tax 401(k) Transfers and Taxable Earnings in 1099-R

[Fresher_TTU]

Hello All,

I received a 1099-R form from Fidelity and have the following details:

1. I contributed $5,000 in after-tax dollars to my 401(k) after-tax account.

2.  I made multiple transfers from my after-tax 401(k) during the year—one transfer of $1,000 and another of $4,000.

3.  When I transferred the $1,000, I had earned approximately $15 in gains. I moved this $15 to my Rollover IRA account at Fidelity.

4. When I transferred the $4,000, I had earned a dividend of $50. I moved this amount from my after-tax 401(k) to my Roth IRA at Fidelity. Fidelity mentioned that I would have to pay taxes on this $50, which is reflected in Box 2 of my 1099-R.

My question is: How should I report these transactions correctly? Since one portion of the earnings went to my Roth IRA and another to my Rollover IRA, it seems that the amount moved to the Rollover IRA is also being taxed when I enter the form as is. How can I ensure that only the taxable portion is correctly reported?

[dmertz]

To accommodate TurboTax's inability to deal with a Form 1099-R that reports rollovers split between rollovers to a traditional IRA and rollovers to a Roth IRA, you must split the Form 1099-R into two, one for the amount rolled over to the traditional IRA (~$15 in box 1, $0 in boxes 2a and 5) and the other for the portion rolled over to the Roth IRA ($5,050).  The taxable amount of $50 shown in box 2a and the $5,000 shown in box 5 of your code-G Form 1099-R will go on the split form that you'll use to report the rollovers to the Roth IRA ($5,050 in box 1, $50 in box 2a and $5,000 in box 5).  These amounts will sum to the respective amounts on the original Form 1099-R.