Roth Conversion Code G

[Snaggletooth]

Client tells me she is converting all her conventional IRAs into Roths. About $27,000.
There are four 1099-R forms from four DIFFERENT custodians.

ALL of them have Code G in Box 7. From my understanding, that is a non-taxable rollover from one type of
deferred compensation account into another, and definitely NOT a rollover into a Roth account.

I doubt it is just a mistake since all four of them have this code G. Three of them have 0.00 as the "taxable
amount" and the other has the entire amount as taxable, but still has code G.

I told her she probably does not have a Roth, and has had a misunderstanding with her new broker.

Is there any possible way there can be a distribution to a Roth, and still bear a "code G?"

[ChEAr$]

Client tells me she is converting all her conventional IRAs into Roths. About $27,000.
There are four 1099-R forms from four DIFFERENT custodians.

ALL of them have Code G in Box 7. From my understanding, that is a non-taxable rollover from one type of
deferred compensation account into another, and definitely NOT a rollover into a Roth account.

I doubt it is just a mistake since all four of them have this code G. Three of them have 0.00 as the "taxable
amount" and the other has the entire amount as taxable, but still has code G.

I told her she probably does not have a Roth, and has had a misunderstanding with her new broker.

Is there any possible way there can be a distribution to a Roth, and still bear a "code G?"

I dont' think so. All the ones I've ever seen bear either a code Q or code T. You need to see some evidence as to titling of the new "Roth" or whatever account. She must have some paperwork from opening th eaccount.

[mactoolsix]

Client tells me she is converting all her conventional IRAs into Roths. About $27,000.
There are four 1099-R forms from four DIFFERENT custodians.

I told her she probably does not have a Roth, and has had a misunderstanding with her new broker.

I agree, these are not conversions to a Roth.

However, in the "new brokers" favor, he now has control of the IRA investment account - maybe a little deceptive??

Mike

[Gary2]

ALL of them have Code G in Box 7. From my understanding, that is a non-taxable rollover from one type of
deferred compensation account into another, and definitely NOT a rollover into a Roth account.
...
I told her she probably does not have a Roth, and has had a misunderstanding with her new broker.

Is there any possible way there can be a distribution to a Roth, and still bear a "code G?"

Your understanding is incorrect.

Code G is a direct rollover from a qualified plan into another qualified plan. A Roth account is a qualified plan, so code G is correct - with one exception. The exception is that a rollover from a designated Roth account into a Roth IRA gets code H. Thus code G can be either taxable or non-taxable, while code H would always be non-taxable. You could always ask for either the 5498 or a statement from the new account, but code G is the correct code for most direct rollovers, regardless of whether the new account is a Roth.

I dont' think so. All the ones I've ever seen bear either a code Q or code T. You need to see some evidence as to titling of the new "Roth" or whatever account. She must have some paperwork from opening th eaccount.

Q and T are for distributions from Roths. They say nothing about it being a rollover.

[Burke]

Code G is a direct rollover from a qualified plan into another qualified plan. A Roth account is a qualified plan, so code G is correct ...... Thus code G can be either taxable or non-taxable,......

OMG. So you are telling me we need to investigate every 1099R with a Code G to determine what type of account they rolled it into?

[Traveling EA]

1099

Is it possible what was rolled over was from a quaified plan such as an 401K into a traditional IRA - hence the code G? Then is it possible the client rolled then IRA to a Roth?

[Matt Sova]

Contact the broker

That is probably the only way to straighten this out. She may have rolled from employer plans to an IRA then from the IRA to a Roth, but did not bring you that 1099-R. Or, it may have never been rolled to a Roth.

[Gary2]

OMG. So you are telling me we need to investigate every 1099R with a Code G to determine what type of account they rolled it into?

"Investigate" is such a strong word. No, you don't need to call up CSI, but if you don't have the matching 5498, you have to ask. And if you do have it, you need to look to see if it says Roth on it (often just in the name of the account).

People who rolled over into a Roth will know that they did. People who don't have a clue most likely didn't put it into a Roth.

[Gary2]

Is it possible what was rolled over was from a quaified plan such as an 401K into a traditional IRA - hence the code G? Then is it possible the client rolled then IRA to a Roth?

Possible, but then there would be two 1099-Rs, both code G.

[Burke]

"Investigate" is such a strong word. No, you don't need to call up CSI, but if you don't have the matching 5498, you have to ask. And if you do have it, you need to look to see if it says Roth on it (often just in the name of the account).

People who rolled over into a Roth will know that they did. People who don't have a clue most likely didn't put it into a Roth.

Well, I will put on my deerstalker's cap, I guess. Never occurred to me that I would have to look past the 1099R if it showed "G." I do ask for addl info if it is coded something else. (There should be a different code for direct rollovers to a ROTH, IMO.) Just had a big one coded 7, and it turns out they rolled it over into a qualified TSA. Had to get documentation from the insurance co.

[Golden Rocket]

From "Instructions to Recipient"

on the back of the 1099-R. Reads as follows:

G - Direct rollover of a distribution (other than a designated Roth
account distribution) to a qualified plan, a section 403(b) plan, a
governmental section 457(b) plan, or an IRA

I don't know that this settles anything, but with this kind of cryptic language, I don't how
the recipient (or anyone else) is supposed to know what to do....

I think the consortium of IRS gurus and financial institutions could have come up with something
more definitive than this....

[Gary2]

... on the back of the 1099-R. Reads as follows:

...
I don't know that this settles anything, but with this kind of cryptic language, I don't how
the recipient (or anyone else) is supposed to know what to do....

That's why I look at the 1099-R/5498 instructions (the ones for the people preparing the form). It's much more informative.

Aside: Splitting the first sentence across the title and text means half the sentence gets lost when quoting.