Roth IRA Distribution

[ChiHoang]

My client is 63 years old, took out $8,900 from Roth IRA which he invested for more than 5 years. On form 1099-R, distribution code is T. Why is it included in his income ? Do I need to do something in ProSeries so it's not taxable ?

Thanks,

[SensibleandHourly]

Perhaps have your client check with the financial firm that created the form? Either there is a legitimate reason for that code that is not clear or perhaps simply an error? Either way, the financial firm is likely able to clarify. 

[Just-Lisa-Now-]

Youre sure its appearing as taxable income on the front of the 1040?  When I input a Code T, it doesnt show up as taxable.

[Terry53029]

put a code Q in box 7

[ChiHoang]

Yes code T, distribution shows up on line 4a and 4b. I'm working with ProSeries Basic.

Thanks for your quick response

[ChiHoang]

On 1099-R, it's code T. Do you suggest me to change it to code Q ? But IRS has code T, will it cause any problem ?

Thanks

[SensibleandHourly]

following...... 

[Terry53029]

Changing to a Q will not cause a problem

[qbteachmt]

"which he invested for more than 5 years."

That's not how the various 5-year rules are stated, though.

I recommend investopedia articles, such as:

https://www.investopedia.com/ask/answers/05/waitingperiodroth.asp

Once you confirm everything about this scenario is qualified, you would use the applicable code and not the code from the 1099-R. Remember that the issuer only knows about the distribution, really. They don't know the entire event that transpires. For instance, they won't know about indirect rollovers.

[ChiHoang]

Got it. Thank you so much.