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Errors & Diagnostic-1099-R line 7 G Code where Distribution is Taxable

Level 1

The 1099-R received from a large plan administrator shows a line 1 and 2a taxable distribution from a 401K.  The taxpayer used the proceeds to fund a Roth IRA with the same firm that is the plan administrator.  The taxpayer funded the taxes from another source. Line 7 of the 1099-R is marked "G" which represents a rollover to a qualified plan.  The line 7 G entry in Proseries causes the distribution to be treated as tax free even though line 2A indicates the distribution is taxable.  Having no entry in Line G causes an error notice but does result in the distribution being taxable.  Living with the error notice appears to be the correct way to complete the return.  Seems like there should be some override created to eliminate an error notice where Line 2a indicates the distribution is taxable despite Line 7 being marked with code G.

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2 Comments 2
Level 15

@PFS4757   does entering the amount on Page 2, Section B -  Rollovers, Roth conversions, Roth Rollovers  eliminate your error ?   

Level 15

If this is from a qualified tax-deferred type account to Roth, this is a Conversion. Not a Rollover.

401(k) ==> Trad IRA is rollover

401(k) to Roth is taxable conversion.

The 1099-R is from the provider for the money out of the other account. Then, you do the next step and address where the money went.

"The taxpayer funded the taxes from another source."

Exactly. If this was done directly, there never is any withholding. If this is done through the client, there is required withholding (not taxes). In this case, it's still taxable anyway (unlike 401(k) to Trad IRA). They get the benefit of a gross redeposit instead of a net, for the conversion.


You posted this not in the community help section, It's only an error until the entries are made and that resolves the condition.

"Level Up" is a gaming function, not a real life function.
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