help on recharacterizing a 1099r with wrong code

Forum|Forum|5 years ago
March 25, 2021
3 replies
34 views

code on 1099r states 1 and D the total amount was rolled over and should not be taxable, PLEASE tell me how to change this on the tax form.. the financial advisor said it states a code 1035.... When i go to the work sheet and check the box rollover it STILL keeps it taxable. Do I manually change the code from a D to a G ??

ProSeries Professional

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qbteachmt

Level 15

It's not the wrong code. The issuer has the code that applies to their perspective.

For instance: Code 1 is Early distribution.

What you are doing is entering how the taxpayer handled it. You won't change the 1099-R at all. You enter that info as you see it provided.

You would need to provide more details for us, such as age of the taxpayer, type of account, rolled directly (trustee-to-trustee), into the same type of account, withholding or not, etc.

See this article: https://proconnect.intuit.com/community/individual/help/proseries-form-1099-r-faq-s/00/4853

Don't yell at us; we're volunteers

shf1957Author

Level 6

I fully understand what the code 1 means... There age requires code 1.. but it was a roll over and there wasn't any taxes with held because the issuer understood that it was being transferred to another firm for a roll over. ( Otherwise they would have been required by the irs to withhold atleast 10percent) This is a very large amount. I checked the box for it being a full roll over BUT it still kept the taxes owed around 40,000.00 I remember years ago there was something i could do on my end .. and when the 5498 form comes out in LATE May it will show this...Does any one have any suggestions?

qbteachmt

Level 15

"There age requires code 1.. but it was a roll over"

Code 1 still applies. You have to follow up on the tax return to show what the taxpayer did with the money.

"and there wasn't any taxes with held because the issuer understood that it was being transferred to another firm for a roll over. ( Otherwise they would have been required by the irs to withhold atleast 10percent)"

What does "being transferred" mean? Did your taxpayer take the money directly, and then make a rollover to some other account under some other plan?

"This is a very large amount."

That's not part of the issue. It can even be "entire account balance."

"I checked the box for it being a full roll over BUT it still kept the taxes owed around 40,000.00"

Okay; was it also "same account type to same account type?" and was it within the required time frame?

"I remember years ago there was something i could do on my end .. and when the 5498 form comes out in LATE May it will show this...Does any one have any suggestions?"

Did you read the link I gave, where one of the things to click is:

How do I indicate on the 1099-R Worksheet the distribution was a full or partial rollover?

And another on that same page is:

How do I indicate the distribution is exempt from the 10% penalty for the 5329?

And did you follow those instructions, and use that worksheet that is referenced there?

Remember: none of us can see what you are looking at or what you did.

The 5498 is for the money In. The 1099-R is for the money Out.

The tax form is for what happened to the money in between, how it moved, when it moved, who moved it.

Was it Direct? Did your taxpayer "touch" the money in between? If so, how long before they did what they did? What sort of account is it From? What sort of account did it go into?

If you answered all questions and selections for the reality, then something they did or did not do has a taxable event condition.

We can't help without these details.

Don't yell at us; we're volunteers

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