Reply To: 1099-R on Roth IRA annuity payment

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#14850
Alan S.
Participant

Consider the earnings as part of the total payment. There is no need to break it out as if it was generated on an excess contribution made by you. A correct 1099R would show the total 1600 amount as a Q coded qualified distribution.

While the 7 code should never be used for a Roth distribution, it does reflect that TIAA did not consider it any different than a normal post 59.5 distribution had this been a TIRA.

For the 8606, you make a good point that all your owned Roth IRAs are treated as one for tax purposes when it comes to basis tracking. Therefore, your Roth basis recovery should factor in your Roth basis in total less basis recovered in Roth distributions. Perhaps you still have enough basis in conversions to cover the 1600, however using an 8606 could be viewed by the IRS as a suggestion that your Roth is not actually qualified after all. Another reason why the 8606 proposal is a compromise with some flaws.

Note that most tax programs support Form 4852 with a filed return.

  • This reply was modified 7 months ago by Alan S..