Reply To: 1099-R on Roth IRA annuity payment

Home Fairmark Forum Retirement Savings and Benefits 1099-R on Roth IRA annuity payment Reply To: 1099-R on Roth IRA annuity payment


As mentioned before, I have posted about this issue to the Morningstar TIAA discussion forum. I’ve received two suggestions:

#1: That TIAA might claim that the correction payment is taxable because it was not distributed from my Roth IRA, but that it was TIAA’s “general account” * that was paying for the correction. However, my understanding has been that once I “converted” the Roth IRA to the immediate annuity contract, the Roth IRA went out of existence. I.e. there is not some “fund” specifically for my personal annuity benefits.

(* Actually I guess it would be a separate, rather than general, account that would be involved here, since my annuity is presently variable.)

#2: That I could avoid taxation of the correction payment by reporting it in Part III of Form 8606. Scrutinizing the form I can see that arithmetically this might work, but I’m wondering if it’s O.K. to use it for annuity payments. Was the Roth IRA distributed when I “converted” it to the annuity contract, or do the annuity payments constitute Roth IRA distributions?