Inherited Roth 1099R distribution marked distribution code T

[DAP]

I need assistance with a 1099R distribution code T. Neither box 10 allocable to IRR within 5 years or box 11 1st year of designation Roth contribution noted. I put  negative 1 in taxable amount as distribution made due to death to stop taxability. What is happening is it is reducing taxpayers basis on 8606. Since it was a Roth IRA with $6938 he withdrew from the death of his Mom in November how do I get it to not reduce his contribution  balance on 8606. Any thoughts on how to get it from posting to 8606?

[qbteachmt · Accepted solution]

T means there is no confirmation that the 5 year rule was met.

As long as it's only basis, the 5 year rule isn't applicable anyway. That's a rule for distribution of earnings.

Yes, it reduces basis in that account.

[DAP]

Good Morning

The Roth IRA was inherited November from my clients Mom .Schwab distributed 50% to each heir.  My issue is the box is only marked with a T and not a 4 yet it clearly states it is for a beneficiary as it is stated in the recipient as Roth bene of Debra. The 8606 is only for my clients contributions and his basis should not be affected . I am trying to get the distribution of his Moms Roth IRA from carrying to his 8606. I just don't know how to override the 8606 in the software.

[DAP]

I was able to figure it out Thank you

[qbteachmt]

4 means Death. You indicated your taxpayer now has this as an inherited Roth, so the beneficiary code for distribution due to death doesn't apply.

T = exception applies.

[sjrcpa]

@DAP  Please share the solution for the benefit of the next person who has this issue.

[DAP]

Sure  if you go to the details screen of the 1099R and tab over to  the 8606, and under the that the forth information says treat as inherited ( which it was). when you go the the ? the screen appears to explain and the inputted amount is not reflected on the Roth worksheet as a distrbution from clients account.

Form 8606
Traditional/traditional SEP/traditional SIMPLE IRA: 1=report on Form 8606, 2=exclude [Override]
Value of all traditional/traditional SEP/traditional SIMPLE IRAs at 12/31/25 (plus outstanding rollovers) (-1=none)

Select
Qualified first-time homebuyer expenses (Roth 5-year holding period met)

Select

Treat as inherited

*Treat as inherited

Select the box if this distribution is from an inherited traditional IRA or Roth IRA that the recipient isn't treating as theirown, as described in IRS Pub. 590-A.