Happy day....nice to find an old issue to re-use. A client receives a 1099-R with code 7 and the IRA box marked. The preparer and....ahem....reviewer...confirmed that it was a conversion, but failed to mark the B5 box on the 1099-R worksheet, resulting in lines 16-18 on the 8606 having no amounts.
When I mark the B5 box, the 8606 correctly populates. There is no change in tax. The instructions for amending the 8606 are not precisely clear for our circumstance. Options:
1. Efile the 1040X with zero tax change and be sure the 8606 is filed with it
2. Sign and mail the 8606.
And so, I ask you, the amazing people of this forum...what is the appropriate course of action?
Happy day....I am grateful for your response. The instructions indicate there is a penalty only if there was nondeductible contribution or if there was an overstatement of nondeductible contributions. In this circumstance, it was a conversion, which I believe is different from a nondeductible contribution. That said, I will absolutely file the 8606. In fact, since an 8606 was originally filed with the return, I'll include the original and stamp it "As Originally Filed."
Thank you for taking the time to lend your brain. 🙂
You stated it didn't change the taxes, and you stated it was a conversion. About the only time that happens is a backdoor Roth, which includes nondeductible contribution. You know what applies and what doesn't, so just do what applies.
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