Received 1099-R’s, one of them with Code G

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    I think this is an easy questions for knowledgeable people but not for me. Note: we’re MFJ.
    Last year I changed jobs so I rolled my 401k to the new employer’s 401k.
    VOYA, administrator of the old 401k, sent me a check (of course addressed to the new plan admin’s name which is Fidelity) which I forwarded to Fidelity.

    I was kind of surprised to receive 1099-R for the gross distribution, but it has a code G meaning it’s a direct rollover. Googling on how to report it doesn’t help because the answers I found said that tax software will know how to handle just answer its questions correctly. But I’d love to know what paper forms this gross distribution should be reported on even though it’s not taxable. So a few questions on how to handle on my return if I did manually on paper.

    1. It looks like I should report this gross distribution on Line 4a of Form 1040 and then write “Rollover” next to line 4b. Is this correct?
    If yes, then why don’t instructions specify distributions from *retirement plans* or *qualified benefit savings plans* or *401k plans*? They talk about IRA, Roth IRA, SEP IRA, and Simple IRA…nothing alluded to 401k.

    2. We also did a Backdoor IRA’s in 2019. One of 1099-R’s shows $6,004 in boxes 1 and 2a. The other shows $7,002 in the same boxes.

    3. If I read Line 4a & 4b instructions correctly, I don’t need to attach a separate statement to our tax return to explain to the IRS what’s happening because the Exception 2 applies (for question #2 above) and one more exception. Is this right?

    4. Let’s say I had $100k 401k rollover. Do I show $113,000 on Line 4a and write “$100,000 Rollover” next to Line 4b and type $6 in 4b (after completing Form 8606 for both)?

    Thank you.

    Alan S.

    1) You would report it on lines 4c and 4d. A 401k is a qualified plan treated as a pension. Lines 4a and 4b are for IRAs only. Your 1040 would show the total distribution on 4c and 4d would be blank. “Rollover” should be entered just to the right of “taxable amount.

    2) The total of 13,006 goes on line 4a because you meet the exception of converting to a Roth (Exception 2). The taxable amount of the conversions goes on 4b, but is calculated on Form 8606 before entering the taxable amount on 4b. Each spouse has their own 8606.

    3) No explanation needed. The 8606 forms take care of that. You do not have to enter “conversion” or “rollover” next to 4b.

    4) 4b should show only $6 taxable. However, if you are using a tax program you might get into some rounding differences for the non taxable decimal on Form 8606. The non taxable % should be carried out to 4 decimal places to get the most accurate result.

    5) This response assumes that neither of you have a non Roth IRA balance on 12/31/2019 and have to other 1099R forms for TIRA distributions.

    6) Line 14 of each 8606 should be blank with no IRA basis carried over to 2020.



    Awesome! Thank you for your clear answers <clapping my hands>.

    Lazy me, I was so focused on reading and re-reading wording on Lines 4a and 4b about the 401k rollover that it didn’t dawn to read further. Actually, somebody had the same question about the 401k Rollover on TT forum and the answer was that such rollover will be handled on 4a and 4b lines. Luckily I asked my questions here!!

    Yes, I’m familiar with 8606 forms. That’s the reason I rolled my 401k to my new employer’s plan because rolling it to an IRA would have prevented us from performing a backdoor Roth IRA in 2019 or later so we are good.

    Well, if no other surprises from brokerages I should be ready to start tax filing quite soon!

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