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Taxpayer rolled over IRA to a different bank-1099R shows it as taxable

Forum|Forum|5 years ago
April 11, 2021
7 replies
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The taxpayer took out $50,000 from Bank A, which sent a 1099R showing it all as taxable and also "taxable amount not determined". Code 7.

He rolled it over a month later to Bank B, which shows the rollover contribution. It should not be taxable but if I show the $50,000 distribution and put 0 taxable, I get an error message. How do I report this?

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Best answer by dkh

Complete the 1099R boxes same as shown on 1099R then do as @Camp1040 says find the section on the worksheet that will change the information to a rollover

Camp1040

Level 10

Scroll down on the 1099-R worksheet and read the sections that follow and you will find out how to do it. Rollover section of the worksheet is a big clue.

dkhAnswer

Level 15

Complete the 1099R boxes same as shown on 1099R then do as @Camp1040 says find the section on the worksheet that will change the information to a rollover

qbteachmt

Level 15

"It should not be taxable"

But, for reference, Bank A didn't know this. They don't know anything about what the taxpayer will do with those funds, and even providing the info as intent, doesn't mean it happened or met the requirements.

Only the taxpayer knows if they did everything right and that this qualifies for rollover treatment. That's why you are entering the info into the worksheet. Enter the 1099-R as it was issued, then address the followup actions that the taxpayer did.

Realize, please, that if there was withholding on that distribution, did the rollover include that amount as a "make up" amount of funds? If not, you have a Partial Rollover and partial taxable distribution.

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U

Username is two wordsAuthor

Level 5

Got it, thanks. Not saying Bank A did anything wrong.

qbteachmt

Level 15

"Not saying Bank A did anything wrong."

Of course not. They issue the 1099-R for the money Out.

Not for what the taxpayer decides to do with it.

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J

jonicap

Level 2

This issue is not resolved. On the 1099R worksheet, I have a 1099R, box 7 code 7D. The total distribution (box 1 and 2a) is 50,000. He rolled over $30,000. Taxable amount should be $20,000. On page 2, Line B2 I reported the partial rollover of $30,000. It is calculating $50,000 taxable amount. This needs to be fixed immediately so that it computes the correct taxable amount.

qbteachmt

Level 15

@jonicap

"This issue is not resolved."

This wasn't your topic, so it's hard to know if this got resolved or not. You really should start your own new topic and ask the question that has your details, when you see a topic like this that is from tax year 2020. If nothing else, the regulations change often.

"This needs to be fixed immediately so that it computes the correct taxable amount."

Did you read this entire topic and scroll to the Rollover section so that you marked how much is Rollover? Does this really qualify as a Rollover? What sort of account/plan is it from and to?

I found this on the internet for you:

"D is the new 'nonqualified annuity distribution code'. The taxable amount of the distribution should still be indicated in Box 2a based on the differing rules depending on when the annuity was purchased."

https://ttlc.intuit.com/community/retirement/discussion/on-form-1099-r-box-7-is-marked-7d-how-does-that-translate/00/595803

Which means you might have some research to do.

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