1099-R Code

[dsi]

Here's my situation:

In 2009, H dies and W gets a total distribution from H's 401k and a 1099-R coded"4".

W consults with CFP and rolls over the $$$ from the 401k. W is 62yrs old, so no penalties.

When I input this info into my program, do I use the "4" code? Or do I use the "G" code since she rolled it over? (This wasn't a trustee-to-trustee rollover).

[Koss]

Rollover

What was it rolled into? A traditional IRA or a Roth IRA?

Or something else, such as an annuity?

If she received a 1099-R with a code 4, then you have to put code 4 into your software if you're going to file the return electronically.

But normally, code 4 makes the distribution subject to regular federal income tax. If it was rolled into a traditional IRA, then there's a way to report the rollover.

In your software, at some point during the data entry for the Form 1099, after you put in the code 4, the program should ask you if all or part of the distribution was rolled over.

If it was rolled over into a traditional IRA, and therefore not taxable, I think the outcome is that the distribution is reported on line 16a of Form 1040, but line 16b remains blank, because none of the distribution is taxable.

If it was rolled into a Roth IRA, then it's taxable. You report it on line 16a and line 16b, and your program should generate a Form 8606 to start tracking the basis...

BMK

[dsi]

Thanks BMK, you are correct...I found in my program where to back it out. Return finished, and invoiced.