Retirement Savings and Benefits
Questions and comments about IRAs, 401k accounts, social security, and other forms of retirement savings and benefits.
1099-R due to loss in Roth 401k
Posted by: aatreya, March 23, 2017 12:59AM
I rolled over an old Roth 401k into my Roth IRA last year, which generated a 1099-R form with distribution code H, as expected. However, I also received a second 1099-R form with zero in box 1 and 2a and a nonzero amount in box 5. At the time of the rollover, there was a loss in the Roth 401k relative to the total contributions to the account, and the amount listed in box 5 is the difference.

How should this second 1099-R form be reported (e.g. in Turbotax)? Is the loss deductible in any way on my 1040?

Thanks.

Re: 1099-R due to loss in Roth 401k
Posted by: Alan S., March 23, 2017 02:34AM
How much was in Box 5 in the first 1099R? The total of the Box 5 amounts should equal the amount of contributions you made to the Roth 401k. I don't why they did not just report that figure in the first form, but perhaps the second form was to correct the error.

You cannot deduct the loss, but treat the Box 5 total as regular Roth IRA contributions in your Roth IRA. That increases your Roth IRA basis from regular contributions, which goes on line 22 of Form 8606 if you take a non qualified Roth IRA distribution.


Re: 1099-R due to loss in Roth 401k
Posted by: aatreya, March 23, 2017 02:55AM
Thanks. The first 1099R had the same amount in box 5 as in box 1, which was the balance of the account at the time it was rolled over. Like you suggested, I think the second one was to correct the error.

Is there any place I should actually write the box 5 amount on my return, or is it just to be kept for future records in case an early distribution is taken?

Re: 1099-R due to loss in Roth 401k
Posted by: Alan S., March 23, 2017 04:45PM
This does not go on your return. Line 16a and 16b will report the dollar amount actually transferred and that is the only current tax reporting.

I would make a copy of those 2 1099R forms and staple them to the 5498 you will receive in May reporting a rollover contribution to your Roth IRA. Make a note that the 1099R amount supercedes the 5498 rollover amount with respect to your Roth IRA regular contribution basis.



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