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Partial Roth Conversions

rstone
Level 1

Client rolled over a $100,000 IRA, $25,000 of which was converted to a ROTH.  The 1099-R has code G in box 7 and $100,000 in box 1, $0 in box 2a. I put the $25000 as a Roth conversion amount on the 1099-R worksheet Line B6, but because code G is on the 1099-R, it is not taxing the $25,000 because it is saying it was complete rollover.  The only way I can get the $25,000 taxed is to change the code in box 7 to 7 and put $25,000 in box 2a as the Taxable amount.  Is there a way to show a partial roth conversion as part of a rollover?

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3 Replies 3
WilliamCDavis
Level 1

Get the 5498. It may have the information you are looking for.

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rbynaker
Level 11

I would expect a second 1099-R for the Roth conversion.  Follow the money through statements if you need to.  I've found that, in this area, often what clients think happened and what really happened are two different things.  Find out what really happened, then figure out the tax implications.

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qbteachmt
Level 15

I agree with @rbynaker  and it would help if you knew this was direct or indirect. If your client took possession of the funds in between, then put that into two different brokerages/accounts, you should expect one 1099-R to show the full distribution, but 1 or 2 5498 to show the money In.

Or, you likely have one 1099-R for the money out, into another traditional IRA. Then, that new Traditional IRA account manager will issue the 1099-R for the partial balance that got converted.

Keep watching for the mail.

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