Level 3

Form 8606

Forum|Forum|2 years ago
April 8, 2024
1 reply
7 views

I have a client that made nondeductible traditional ira contributions. I know those get reported on line 1. They also had a rollover from their previous employer to a traditional ira (they got a new job). Part of that rollover was taxable. They have never had to file form 8606 before, but should the taxable part of the rollover be put on line 2 and added to the basis? Thanks!

qbteachmt

Level 15

"Part of that rollover was taxable. They have never had to file form 8606 before"

We're going to need more details, then. Typically, nothing is taxable unless it also is converted. A Rollover from a tax deferred plan/account to a tax exempt plan/account, such as 401(k) to Roth 401(k), is taxable. Or both 401(k) and designated Roth to Roth IRA, is taxable. The types of plans/accounts matter, because there likely was supposed to be a Form 8606. Or perhaps it was some sort of ESOP? Are you sure it was "rolled" to an IRA account? There was a topic posted here last week about TSP-to-IRA, which isn't even allowed, for that taxpayer.

Don't yell at us; we're volunteers

J

jjtrcka22Author

Level 3

It was supposed to be a rollover from their 401k they had with their previous employer to a traditional IRA. But part of it was taxable. I guess I need to get the client to check with their previous employer.

J

jjtrcka22Author

Level 3

Some more information until I hear back from the client:

Using hypothetical numbers:

On the 1099r:

Box 1: 25,000

2a.: 5,000

2b.: Total Distribution

5: 20,000

7: Code G - Direct Rollover

Sign up

Login with SSO

Let's get you signed in

Login with SSO

Scanning file for viruses.

This file cannot be downloaded