ROTH 1099-R Distributions in a Trust Return (Form 1041)?

[csim]

I am using the "TurboTax Business Windows Software" and I am trying to figure out how to enter a 1099-R from a ROTH IRA, which has tax free distributions, in a Trust Return (Form 1041).

The Trust has a series of ROTH IRA that it must take distributions on and distribute it to the beneficiaries. Under the "Income Tab", I can enter a 1099-INT, 1099-DIV, and "Other income or loss" but they are all taxable income where distributions from a ROTH IRA is not taxable. Where is the 1099-R for a ROTH IRA located in the "TurboTax Business Windows Software Step-By-Step" questions?

[csim]

Unfortunately that does not not help since the money is coming from a ROTH IRA and none of the distribution is taxable.  It appears that anything entered in the "Other Income" box MUST BE TAXABLE. I am looking for a "Non-Taxable Other Income" dialog box similar to the "Other Income" dialog box where the Trust can report receiving and distributing non taxed money like for a ROTH IRA or a Federal Tax Free Mutual Fund.

[csim]

Thank you for your answer.

I found the form in TurboTax Business called "Allocation of Deductions for Tax-Exempt Income" that has a "Tax-exempt Income" field (I put $10,000 and circled it) that is next to the "Income->Other income or loss->Other income or loss" dialog in the Step-By-Step but I can't find where this "Tax-exempt Income" field in the Step-By-Step and how to access it.

[csim]

What you said does not make sense. So if an individual receives a 1099-R with tax free distribution (tax free annuity or ROTH) the individual need to report it on their tax return, but if a trust receives the same 1099-R with tax free distribution (same tax free annuity or ROTH) , the form should be ignored and not reported to the IRS. Then why does the trust receive a 1099-R in the first place if it does not need to be reported. Is the IRS going to be okay receiving an 1099-R that is not tied to a tax return.

Also the various accounting firms who have been doing the trust, who have been doing it in the past, they have been reporting it on a Schedule K-1 Line 12A and 12J. I have been trying to duplicate their results myself, but can't seem to get access to the Form/Lines through TurboTax's Step-By-Step method and not sure why.

[csim]

Yes. A 'T' and '4'.

[csim]

I realized that I did not mention that Schedule K-1 also had Line 14A (Tax-exempt interest) has information inaddition to Line 12A and 12J.

[macuser_22]

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@csim wrote:

Yes. A 'T' and '4'.

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That would be an improper 1099-R.  Code T can not have any other code with it.

The issuer should issue a corrected 1099-R.

[csim]

They came from Fidelity Investments. Two of the 1099-R have a 'T' and other one has an '4'.

[macuser_22]

Then the T indicated a Roth IRA distribution that may or may not be inherited.

The 4 indicates an inherited distribution from a non-Roth account,  If the IRA/SEP/SIMPLE box is checked then it is from an inherited Traditional IRA.

[Anonymous]

Just would like to confirm the handling of a 1099-R that I received for my mother-in-laws trust.  The 1099-R was issued from her State Teachers Retirement Fund.  Box 1 and 5 show a gross distribution amount with the distribution code 4.  There is nothing in box 2a.  Therefore, I do not need to include any information on the 1041 for this distribution.  Is that correct?   I originally included it under other income until I realized that it was not taxable, but would like to confirm.

Thanks.

[macuser_22]

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@Anonymous wrote:

Just would like to confirm the handling of a 1099-R that I received for my mother-in-laws trust.  The 1099-R was issued from her State Teachers Retirement Fund.  Box 1 and 5 show a gross distribution amount with the distribution code 4.  There is nothing in box 2a.  Therefore, I do not need to include any information on the 1041 for this distribution.  Is that correct?   I originally included it under other income until I realized that it was not taxable, but would like to confirm.

Thanks.

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*You* received it in your name, or the trust received it in the trusts name?    Either way it is taxable income, either to you on your tax return or the trust which the trust would then  pass the income and tax to the beneficiaries of the trust on a K-1 form that goes on the beneficiaries tax return.