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IRA distribution

David  R T
Level 1

I took a 2020 RMD in late January 2020 of $22,000  and with the CARES act I repaid the funds in April (new IRS guidelines extended the 60 day  rollover period to August 31, 2020)

Problem is the mutual fund company just sent me the 1099R showing gross and taxable boxes  of the $22,000 and coded R

How do I handle in pro series so this is not picked up as income

Thanks

 

David

 

 

 

 

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14 Replies 14
Just-Lisa-Now-
Level 15
Level 15

Im not sure if R is the correct code or not, butwhen I enter this into Proseries with 22k in boxes 1 and 2a with a Code R, I dont see it show up as taxable.


♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
Bsch4477
Level 3
Level 3

Even if your distribution code was 7 you can avoid the amount being taxed by clicking “this was not a RMD”.  Then report the amount as a roll over. 

ydaleu
Level 2

You have to file Form 5498 to show to the IRS  the amount of Rollover contribution

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qbteachmt
Level 15

This would be incorrect: "You have to file Form 5498 to show to the IRS the amount of Rollover contribution"

Let's review:

A 1099-R is issued to the IRA Account owner by the brokerage or agency where the account resides and reflects money out activity for that year.

A 5498 is issued to the IRA Account owner by the brokerage or agency where the account resides and reflects money in activity for the year.

The tax payer issues neither form. The tax preparer issues neither form. The Tax Return will include form 8606 when specific circumstances apply.

This would be considered a rollover, and not an RMD, and as long as there was no withholding or you "put back" the same amount as was taken even if there was withholding, and met the other requirement(s), then that would be a nontaxable event.

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csanchez
Level 3

I have a 1099-R and withholding. I indicated the full amount was rolled over but the fed w/h is still showing as a withholding for payments received.

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sjrcpa
Level 15

How much was actually rolled/repaid? The gross, or the net after withholding?


ex-AllStar
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csanchez
Level 3

Gross was rolled over.

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qbteachmt
Level 15

@csanchez 

When you entered the client's 1099-R, did you mark it as a Gross Rollover to another qualified account?

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csanchez
Level 3

I checked B1 - Entire distribution rolled over

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qbteachmt
Level 15

https://proconnect.intuit.com/community/individual/help/proseries-form-1099-r-faq-s/00/4853

 

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csanchez
Level 3

Thank you but the problem is that the fed w/h is still showing as withholding in the payments. The RMD was rolled over or actually redeposited and that is calculating correctly,

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qbteachmt
Level 15

"but the problem is that the fed w/h is still showing as withholding in the payments. The RMD was rolled over or actually redeposited and that is calculating correctly,"

Is that the reality? Was there Withholding? If so, they did not get it back. If you get a Distribution and there is withholding, you have this math:

Gross Distribution minus withholding = net to you

To rollover this taxable distribution, you have to Make Up that missing money, to put back the same Gross that was removed. Meanwhile, the Feds still have the withholding payment. And if you don't deposit the Gross, then the difference is your Taxable Distribution.

So, what is the reality for what you are working on?

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csanchez
Level 3

I have the 1099-R showing gross distribution and fed withholding. I have a form from the financial institution that issued the 1099-R titled "Waived RMD Rollover Election" indicating the gross distribution deposit as a rollover.

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csanchez
Level 3

I'll check with my client to see if they made up the difference of the fed w/h to deposit the gross amount.

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