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Hi,
One of my client rolled over 250k from 401 k to Roth. He gave me the 1099 R with whole amount is taxable and code G in box 7. This all are correct. But the amount is not flowing to 1040 line 5b and No form 8606 is generating. Did i do anything wrong. Pleae help.
GK.
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Code G is a tax-free rollover. This would have been incorrect by the issuer, but the issuer may not have known it was a conversion, not a rollover. Depending upon their age I would change both the code and the taxable amount on the 1099-R worksheet to Code 2 or 7, fully taxable, and then in the lower section of the worksheet mark it as all converted to Roth.
If the transaction was with the same investment house they should have done this correctly. If from one to another, it's your responsibility to report properly even if the form itself is not correct.
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I selected code and 2 and also checked of B5. now i can see taxable amount in 5b of 1040.However its NOT generation 8606 form
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input it as is with the code g then go down to the bottom of the 1099-R input screen and check off the box for a full rollover to a Roth. WHO gave them the advice to convert $250K in one shot to a Roth? Too late now but I would have rolled to a Traditional IRA first - then done a series of Roth conversion watching income limits and brackets. That's a lot of taxes owed on this one.
It wasn't a roth 401K to a roth ira was it? then the g makes sense.
Terry53029
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Make sure it was a rollover from a traditiional 401k to a Roth IRA, and not a Roth 401k to a Roth IRA.
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Yes, i id. its from regular 401k to Roth
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its not a rollover. He just converted to Roth from 401k.
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This is a conversion from regular 401k to ROTH. His salary too high and now owes 83k.
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@gk wrote:
However its NOT generation 8606 form
I don't think it is supposed to show up on a 8606. Where are you expecting it to show up?
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It doesn't have anything to do with his income. This is a taxable transaction. Just like any other conversion to ROTH.
Same result as if he just took the 401(k) money and put it in his checking account.
The more I know the more I don’t know.
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THANK U
