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Report a Rollover

Hello All, 

I just had a client email this question: 

"I just learned that you are supposed to report 401K rollovers on your tax return.  I had a big rollover in 2020 and never reported it.  I looked on Fidelity's site and there is a 1099 form there."

I think she only had one rollover. Any advice on the types of questions I should ask?

p.s. I didn't prepare those taxes for her. 😉 

Thank you!!

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sjrcpa
Level 15

Get the 1099-R.

See if it has a rollover Code.

If not, have client provide proof of rollover.

Then discuss with client whether she wants to pay you to amend the return, or wait for an IRS matching notice and pay you to respond.

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7 Replies 7
sjrcpa
Level 15

Get the 1099-R.

See if it has a rollover Code.

If not, have client provide proof of rollover.

Then discuss with client whether she wants to pay you to amend the return, or wait for an IRS matching notice and pay you to respond.

Just-Lisa-Now-
Level 15
Level 15
If it was a trustee to trustee rollover, Dist Code G, Im not sure IRS will even send a CP2000 for that.

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
sjrcpa
Level 15

Neither am I.

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qbteachmt
Level 15

"Any advice on the types of questions I should ask?"

Get the details, such as from 401(k) only? Or, was some of it from/put into a Roth? Into what type of account(s) for the from and to, and if there was/is basis, and was any converted? And get the 1099-R and also the 5498, to substantiate answers. Many 5498 came out mid-Aug, for 2020 in 2021.

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"Level Up" is a gaming function, not a real life function.

HI there, 

I have been able to clarify that it was Code G, trustee to trustee move, only one for the year. 

Thank you, everyone, for the advice. 

 

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rbynaker
Level 12

I'm with Lisa, I would just ignore a missing Code G 1099-R.  Nobody's going to be looking for something that's not taxable.

Rick

qbteachmt
Level 15

Code G is not always nontaxable, just because it is direct. You have to confirm there was no conversion involved. And you stated: "I think she only had one rollover." An employer that provides for Roth 401(k) will put the match into the 401(k), which makes 2 accounts to roll, and that means confirming they went their separate ways.

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"Level Up" is a gaming function, not a real life function.
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