The downloadable Turbotax Home and Business for 2024 returns is not letting me enter the correct information for a distribution from a nonqualified annuity that I inherited 7 years ago.
When the decedent died, I elected the nonqualified beneficiary stretch option, pursuant to which I am required to take annual RMDs over my life expectancy. Even though this is not an IRA or a qualified plan, I have to take an RMD every year.
Each year, I receive a 1099-R with code 4D in box 7, which indicates this is a distribution from a nonqualified annuity after death of the owner.
For the past 6 years, when the interview asked if the decedent was born before 1-1-1950, I selected the radio button to indicate that he was born before 1-1-1950, and the next page would inform me that, because the person would have been over 73, I must take an RMD. So, I would check the boxes to indicate that the entire distribution was an RMD. And the interview would move on to the next topic, and not flag any errors. And I would efile my return without issue.
However, Turbotax 2024 changed the 1099-R form in the program, and there is a new section on the form called RMD Excess Accumulation Worksheet. And they changed the interview questions, and it appears they introduced a new error this year.
For 2024, when the interview asks if the decedent was born before 1-1-1950, and I select the radio button to indicate that he was born before 1-1-1950, the next page no longer informs me that, because the person would have been over 73, I must take an RMD, like in past years.
Instead, the interview asks me if the distribution is from either a 430(b) plan or another type of qualified plan. I have to select one of those choices, even though this nonqualified annuity is not a qualified plan. So, I select that it's another type of qualified plan, and the next page says that, if I am required to take an RMD from this account in 2024, enter the amount.
However, when I enter the amount of the RMD I am required to take under the beneficiary stretch option rules, a little message appears and informs me "RMD amount should not be entered for this distribution." Whether I put the amount of the RMD or zero in that box, there is a red exclamation (indicating an error) mark next to the Form 1099-R in the list of "forms in my return." And the numbers I enter are red on the Form 1099-R indicating an error. And nothing I have tried gets rid of the red exclamation point or numbers.
And even though I took the full required RMD, it appears to be believe that I did not take the full amount, because it then asks me if I took the remaining amount of the RMD during the correction window.
Turbotax is not handling this distribution correctly, and I would appreciate any help. Thank you.
