1099r

[tsuewalker]

Client has two 1099R's. One has the code 2 and then the other one has the code J. She says the she rolled over from a 401A to a traditional IRA and then rolled over that to a Roth IRA. If I'm reading the book right, when you rollover from a traditional IRA to a Roth, you pay the taxes now and then when she takes a distribution, it will be tax free. I'm not familiar with these types of transactions. Can anyone help me with this? Your help will be deeply appreciated.

Thanks for your help in advance.

Tanya

[spanel]

Client has two 1099R's. One has the code 2 and then the other one has the code J. She says the she rolled over from a 401A to a traditional IRA and then rolled over that to a Roth IRA. If I'm reading the book right, when you rollover from a traditional IRA to a Roth, you pay the taxes now and then when she takes a distribution, it will be tax free. I'm not familiar with these types of transactions. Can anyone help me with this? Your help will be deeply appreciated.

Thanks for your help in advance.

Tanya

Enter both, one will be taxable, one will not.

Chris

[tsuewalker]

1099r

That's what I did and that's what the return is showing. Is it because of the reason I stated in my original post? She put it in Roth and it's taxable now and won't be taxable when she makes a withdraw from the Roth? She's wanting an answer and I think I'm right but I just want to be sure I'm giving her the correct answer.

Thanks for you help in advance.

Tanya

[spanel]

That's what I did and that's what the return is showing. Is it because of the reason I stated in my original post? She put it in Roth and it's taxable now and won't be taxable when she makes a withdraw from the Roth? She's wanting an answer and I think I'm right but I just want to be sure I'm giving her the correct answer.

Thanks for you help in advance.

Tanya

You cant have it both ways.... Pay no taxes on the pretaxed retirement, then transfer it to a retirement account that is not taxed on the distributions.

If you convert a Traditional to a Roth, you pay taxes on conversion amount.

Chris

[FEDUKE404]

Conversion to Roth IS a taxable event

Spanel (Chris) is correct. Two separate events as shown by the two Forms 1099R . One (likely) results in no current taxable income, the other does result in 2016 taxable income.

Were there also any letter distribution codes in box 7 on either Form 1099R ? Each bit of information shown on a Form 1099R can be important.

I think you may be confused over the terminology of "rollover" versus "conversion" ??

What tax software are you using? Most good versions have clear worksheets/etc that should be reviewed when entering the Form 1099R information. I also would strongly advise carefully working through your software's Q&A when (at least) entering the Forms 1099R information.

FE

[TAXNJ]

See TheTaxBook tab 13 will address your issue in depth. Do you have access? Also if you do a "IRA rollover" search on this site you will see many posts and replies similar to yours.