I don't recall the exact numbers (and I wouldn't post them anyhow), so the numbers below are made up, but the situation is real.
Last spring client rolled monies out of her employer's 401(k) -- some Trad, some Roth -- evidenced by 2 1099-R's, one $15k code G and the other $10k code H. She had a Form 5498 from the local bank showing $25k rollover contributions into a <b>Trad</b> IRA. Hence the SNAFU -- the $15k should have been a Trad IRA and the $10k a Roth IRA.
The same Form 5498 shows about $2 of interest and then $25,002 rolled out (closing the account at the bank). The $25,002 was rolled into the investment arm of the bank into a Trad IRA -- about 2 weeks later, (apparently without any direction of the client to do so) $11k was moved from the Trad IRA into the client's Roth IRA -- the client had a $11k 1099-R code 2. It smells to me that the $11k Trad->Roth transfer was someone realizing the original SNAFU and trying to fix it, and not a Trad->Roth conversion -- I have a call out to the agent that helped the client roll the money.
Any suggestions on how to go about correctly reporting this? I don't imagine I can just say that $10k of the $11k was a Rollover, resulting in only $1k being a taxable Trad->Roth conversion...
Bill
Last spring client rolled monies out of her employer's 401(k) -- some Trad, some Roth -- evidenced by 2 1099-R's, one $15k code G and the other $10k code H. She had a Form 5498 from the local bank showing $25k rollover contributions into a <b>Trad</b> IRA. Hence the SNAFU -- the $15k should have been a Trad IRA and the $10k a Roth IRA.
The same Form 5498 shows about $2 of interest and then $25,002 rolled out (closing the account at the bank). The $25,002 was rolled into the investment arm of the bank into a Trad IRA -- about 2 weeks later, (apparently without any direction of the client to do so) $11k was moved from the Trad IRA into the client's Roth IRA -- the client had a $11k 1099-R code 2. It smells to me that the $11k Trad->Roth transfer was someone realizing the original SNAFU and trying to fix it, and not a Trad->Roth conversion -- I have a call out to the agent that helped the client roll the money.
Any suggestions on how to go about correctly reporting this? I don't imagine I can just say that $10k of the $11k was a Rollover, resulting in only $1k being a taxable Trad->Roth conversion...
Bill
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