1099R Reporting from a ROTH Conversion?

[lzxray]

I have a couple 1099R questions specific to a Roth Conversion made last year.  So, from my traditional IRA, I rolled over $40K.  Of which, $9,6K in federal and $1,6K state taxes were withheld.  In my 1099R, I have $28,8K listed in both box 1 (gross distribution) and box 2 (taxable amount).  Box 2b  (taxable amount not determined) is checked.  Box 4 (Fed. Income tax withheld) has zero listed.  Box 7 (distribution codes(s) listed is “2” with IRA/SEP/SIMPLE box checked.  A couple questions:  1). Am I being taxed again on the net amount ($28,8K) converted from Roth?,  and 2) Is there a way to account for taxes already withheld when the ROTH conversion is made? Thank you!

[dmertz · Accepted solution]

Based on what you have said, it appears that you are missing a code-1 Form 1099-R.  You should have two Forms 1099-R, one with code 2 that reports a Roth conversion of $28,800 (which you have mentioned having) and a separate Form 1099-R that has $11,200 in boxes 1 and 2a, box 2b taxable amount not determined marked, code 1 in box 7 and the IRA/SEP/SIMPLE box marked.  This $11,200 that was withheld for taxes is includible in taxable income and is subject to a 10% early-distribution penalty unless you substituted $11,200 of other funds to complete a rollover or conversion of this portion of your distribution from the traditional IRA.

[lzxray]

dmertz,

Many thanks!  You are spot on...there indeed are 2 - 1099R Forms which I failed to download both.  The 2nd 1099R has all the fields filled out as you have listed.  Again, I appreciate your prompt reply and guidance!