Form 1099R Distribution that Client Says Was Redeposited Before 60-Day Window

[SteveStang]

I have a client who did a distribution from an IRA and reportedly redeposited the amount within the 60-day period. The custodian issued a Form 1099R with box 2 showing the taxable amount as the same as box 1, and box 7 with a Code 1 (no known exception). The Fidelity financial advisor insists that the client statements sufficiently show the trail of funds being redeposited before the 60-day window. I’m reaching out to my tax software for guidance on coding (Drake). But in the meantime, I’m wondering if there is some reference within the library to this sort of issue. I’ve tried looking through the Form 1099R instructions. Are there any other search terms I should use for finding additional reference in either the Tax Book itself or in one of the other sections (IRC, Rev Proc, Announcements)?

Thanks,
Steve

[Rapid Robert]

Try Pub 590A "Can You Move Retirement Plan Assets?".

Coding should not be a problem. Just enter the full amount as a rollover in your software, should be supplemental input on the same screen where you entered the 1099-R, which sounds like it was prepared correctly.

[SteveStang]

That doesn't sit well with me. The software (Drake) doesn't have any special coding or appplicable supplemental areas for data input to mark this as a rollover. It clearly says Code 1. And whatever I may do to override the fields will not jive with whatever Fidelity is reporting to the IRS.

[spanel]

As Robert says... you'll have to take care of it on your side and show a rollover in the software. If the client pulled money out and put it back in themselves within 60 days, the 1099R is correct with the code 1.

The only time a code G should be issued, is when there is a direct rollover from one investment firm to another.

Chris

[rbynaker]

That doesn't sit well with me. The software (Drake) doesn't have any special coding or appplicable supplemental areas for data input to mark this as a rollover. It clearly says Code 1. And whatever I may do to override the fields will not jive with whatever Fidelity is reporting to the IRS.

Sure it does. Put an S in the Rollover/Conversion box (bottom half on the screen in the middle).

[Rapid Robert]

"The only time a code G should be issued, is when there is a direct rollover from one investment firm to another."

I can be more specific than that. The only time a code G shows up is when you have a trustee-to-trustee transfer from a 401(k) (or similar qualified plan) to an IRA. For a trustee-to-trustee transfer from one Trad. IRA to another, no 1099-R is issued in the first place.

[terryats]

I use ProSeries, and the 1099R worksheet has a place to indicate it was rolled over. I never change a code put in box 7

[dtlee]

Since the 1099-R information is transmitted with the return, we are not supposed to change any information on it. Do as rbynacker suggested. There are additional fields in Drake for partial rollowvers.