Quote Originally Posted by John of PA View Post
Taxpayer died and executor changed his IRA from Merrill Lynch to Vanguard, opening a new IRA at Vanguard under the spouse's name (spouse was beneficiary). How should ML code this 1099-R? Code 4 or Code G. The money was in essence a rollover to an inherited IRA but the rollover was from one custodian to another. Merrill did a code 4 (taxable) on the 1099-R. Is this correct?
Sounds like a Bill Clinton "What IS is?" scenario.

IF the beneficiary became owner of the account, then Code 4 could be relevant. Timing is the issue. In all cases a "custodian to custodian" transfer would eventually have to occur.

There is a good chance Code 4 is correct, and then you would have to look at your Form 1099-R data input screen to designate a rollover had occurred. The taxable amount should go to zero, and "ROLLOVER" should appear on the requisite line on the Form 1040.

I would advise against "changing the document" via "corrections" or overrides. . .not a good idea!!. . .especially when there are clearly available options to solve the client problem.

FE