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Roth Distribution, Non-taxable

Ddmac
Level 2

I have Roth Distribution with a taxable amount of zero that is still showing up as taxable even though I enter $0.00 in box 2a. Is there something else I should be doing?

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Ddmac
Level 2

I needed to enter the basis on Form 8606. That is truly what determines the taxable amount.

 

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4 Replies 4
IRonMaN
Level 15

Did you use the correct distribution code?  How old is the client?  What was their basis in the IRA?  In other words, look very closely to see what you missed.

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Ddmac
Level 2

Thanks for your quick response.  

Client is 54, contributions from where the distribution was taken are more than 5 years old.  Box J is entered, $0.00 is entered in Box 2 for taxable amount. I even check with NATP (National Association of Tax Professionals) research dept. We are both at a loss as to why it is showing up as a taxable amount on Form 1040.

 

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RollTide68
Level 8

On the IRA Information worksheet Part V line 22 Opened a Roth before 2015 Checked "YES"?

Is there enough basis on line 23 to cover the distribution?  For example if the distribution is for $7000 is there enough on line 23 to prevent any of the distribution from being taxable?

When I work an example this way it is taxable until I do those items.

Ddmac
Level 2

I needed to enter the basis on Form 8606. That is truly what determines the taxable amount.

 

View solution in original post