1099 confusion

Submitted by Ron Corcoran on Tue, 2022-02-08 16:14

Last year I moved two 401ks to my IRAs. Now I got my 1099s and I’d like to check on a few details ..

For 401k #1, I got 3 1099r to match distribution. One G, one H, one 7.. the later being NUA to taxable brokerage account with cost basis in box 2 and after tax in box 5. Checks were sent to Vanguard directly except for after tax. The amount in box 5 and was done as an indirect xfer thru my bank to Roth.

For 401k #2, I got 2 1099r, one code H matches the Roth (direct xfer), but the second, code G matches sum of the TIRA (direct xfer) & my after-tax that was a direct xfer to Roth. By “direct” xfer I mean checks were made out to Vanguard but sent to me and mobile deposited. I hope this still constitutes a direct xfer ?

So the 1099s that include after-tax to Roth, is that normal/ok ? One “G” for an direct, & one “7” for indirect.

Appreciate your input. Thanks, Ron

I also did an indirect conversion later in the year to make up for tax withheld on a previous conversion. I got one 1099r for the sum of these.

Lastly, I’d just like to re-confirm that the indirect “conversion” does not mean I did 2 within 365-days since one is 401k-IRA and one IRA-IRA.

Appreciate your input. Thanks, Ron



Submitted by Alan - IRA critic on Tue, 2022-02-08 19:47

First, there is no issue with the one rollover limit because rollovers to a Roth IRA from a non Roth account do not count for purposes of the limit.
After these rollovers were deposited to your accounts, I hope you verified that the correct amounts were deposited to the respective accounts. Sometimes this gets messed up and corrections are difficult.
For the 7 coded 1099R, does box 1 equal the total of boxes 2a, 5, and 6 (NUA)?  In other words, does this 1099R include more than the value of actual shares, and you rolled over the difference to your Roth IRA?
Are you filing your own return with a tax program?

Submitted by Ron Corcoran on Tue, 2022-02-08 20:14

Yes, the amounts match and the 1099 coded 7 does have the sum in box 1. I believe the distributions from both 401k only resulted in one indirect but was uncertain because I received the checks. Yes, I typically do my own with TurboTax and plan to do so even tho there’s a lot going on this time. Thanx.

Submitted by Alan - IRA critic on Tue, 2022-02-08 21:20

You might find that for 401k 2, if a G coded 1099R includes amounts such as after tax portions of the pre tax account rolled into your Roth as well as pre tax amounts to your TIRA, you may have to split the entry of the 1099R into two forms, one for the portion that went to the Roth and another for the remainder. Try to enter it first as issued and if you don’t get the desired result, then split the entry as above.

Submitted by Ron Corcoran on Sun, 2022-02-13 18:16

You were correct .. actually had to do a split-input for two of the 1099Rs to pull out the Box-5 amount and do it separately, using the orig box 7 codes (on was code G and one code 7). I have a third 1099R code H (Roth401k-to-RothIRA) that the issuer put the cost basis in box 5 instead of repeating the box 1 amount like still-another H had done and didn’t check “total Distr” box. To make this one “work” on TT, I had to enter the box 5 amount as if it were the same as box 1 to get the proper results on the TT-generated IRA worksheet. Checked the IRS instructions .. it seems this 1099R with cost basis was not incorrect, perhaps the other one was. Does it really matter if I take such liberties to get the proper results ?               

Submitted by Alan - IRA critic on Sun, 2022-02-13 19:02

H coded 1099Rs (Direct rollovers to Roth IRA) should not have a figure in Box 5, but you do need to know how much Roth 401k basis was rolled into the Roth for the purpose of reporting any future Roth IRA distributions. However, that basis info should be provided on a separate statement. Box 5 should only have a number for a distribution to you, but not for a direct rollover and direct rollovers are coded H. Try entering nothing in the Ttax entry for Box 5 of the H coded 1099R forms. You may ask them to reissue the H coded 1099R forms, but if they don’t my guess is that your override will not matter, as the IRS will go by Box 2a which should be 0.

Submitted by David Mertz on Mon, 2022-02-14 12:24

An example in the IRS instructions for Form 1099-R indicates that box 5 of an H coded Form 1099-R should show the contribution basis.

Submitted by Alan - IRA critic on Mon, 2022-02-14 19:58

Yes, I see the example now. For a direct rollover the amount in Box 5 could be anything and be more or less than Box 1. The box 5 amount is for your use in tracking the basis of your rollover. But if your Roth IRA is already qualified and I see you are over 59.5, so if your first Roth IRA contribution was made prior to 2018, then your Roth IRA is qualified and totally tax free including the funds rolled in from the Roth 401k.
If the plan does not correct the 1099R or you are in a hurry to file and your Roth IRA is qualified, you could take a guess at your Box 5 basis since it has no current or future tax impact.

Submitted by Ron Corcoran on Tue, 2022-02-15 22:02

Thanks to both … I don’t really care or need cost basis and ironically l, have to fudge this entry to equal box 1 so that TT gets the proper figures in the IRA Worksheet (background document). I hope taking this “liberty” doesn’t raise any red flags. 

Submitted by Alan - IRA critic on Wed, 2022-02-16 01:54

It is odd that Box 5 must equal 1 since it would be a fluke if your basis in the Roth 401k just happened to equal the value of the account on distribution day. TT should accept any figure that the 1099R indicates for Box 5. You do not need to track the Box 5 basis if your Roth IRA is already qualified.

Submitted by David Mertz on Wed, 2022-02-16 12:12

[Edited] I think RonC is might also have a code G Form 1099-R and might be referring to how a code-G Form 1099-R must be split for entry into TurboTax.  When rolling over just the after-tax amount into a Roth IRA, both box 1 and box 5 will show the same amount for the portion rolled over to the Roth IRA.  The Form 1099-R for the pre-tax portion rolled over to a traditional IRA will then show in box 1 the remainder of the distribution and nothing in box 5 so that the dollar amounts on the two forms entered will sum to those on the original.

Submitted by Alan - IRA critic on Wed, 2022-02-16 15:11

I think we are referring to different 1099R forms. Ron stated that the two H coded 1099R forms for different plans were treated differently with respect to Box 5. P 5 of the 1099R Inst in referring to reporting these rollovers does not even refer to Box 5, but as you pointed out the example on p 10 does.  Which is correct? These 2 H coded 1099R issuers may have been reading conflicting pages which would explain the difference. 
When a G coded 1099R includes a direct rollover from a pre tax 401k to a Roth IRA, Box 2a must show the taxable amount and Box 5 the basis recovery (p 5 of 1099R Inst). While 2a is always 0 for an H coded, is there any need for a Box 5 amount in that situation? I think the IRS needs to clarify pages 5 and 10 with respect to H coded 1099R forms.

Submitted by David Mertz on Wed, 2022-02-16 15:45

For those who use TurboTax, TurboTax automatically adds the box 5 amount of a code-H Form 1099-R to Roth IRA contribution basis that it tracks.  An amount in box 5 of this form also tells the IRS how much Roth IRA contribution basis has been acquired from the designated Roth account, helping to substantiate any amount of contribution basis claimed on Part III of Form 8606 when someone takes a nonqualified Roth IRA distribution.
If box 5 equals box 1 on a code H Form 1099-R, that would probably be reasonable if the designated Roth account was qualified.  When the designated Roth account is qualified, the entire amount rolled over to the Roth IRA becomes contribution basis in the individual’s Roth IRAs.

Submitted by Ron Corcoran on Thu, 2022-02-17 17:34

The Roth 401(k) that I had for just a few years provided a value in box 5 that was roughly 50% of box 1 and is likely the actual cost basis (my contributions). The Roth 401(k) I had for @ 10-12 years put the full amount from box 1 into box 5 also. I checked my contribution history for the later and got a value roughly 75% of box 1.. it was in a much more conservative investment choice. The weird part is what TT does with the box 5 entry .. it uses it in all the following places.       In Part II Roth IRA – Basis (Contribution and Conversion History) Line 8 Roth IRA:  Contribution basis carryover as of 12-31-21In Part V Roth IRA Contribution and Conversion Balancesin section for .. 2021 Transactions – ContributionsLine 34 Rollover from Roth 401(k) and Roth 403(b)in section for .. Balance c/over to 2022 (Basis – After 2021 Transactions)Line 51 Cumulative regular Roth IRA contributions, including rolloversfrom Roth 401(k) and Roth 403(b) Since I’m over 59.5, no concern for real CB, I think the full amount (box 1) more accurately fits in this IRA Worksheet that TT develops, at least for my needs. What happens with Box 5 entries on type 7 and type G is for another post 🙂   

Submitted by Alan - IRA critic on Thu, 2022-02-17 19:47

Perhaps the 10-12 year Roth 401k was qualified when you took the distribution or did a direct rollover. For a qualified Roth 401k, Box 5 should equal Box 1, but if the Roth 401k was underwater, it seem equitable for Box 5 to show the higher actual amount contributed.  Of course, if your Roth IRA is already qualified, any Roth 401k funds rolled in are also qualified, and the Roth IRA cost basis no longer matters. Ttax should have collected the basis info for your Roth IRA, knows your age, and if the Roth IRA is qualified, I don’t know why they would bother to update the Roth IRA basis.
There are several transactions affected, such as indirect rollovers of partial or full Roth 401k distributions, to both non qualified and qualified Roth IRAs, coming from both qualified and NQ Roth 401k accounts.
It is also interesting to note that if an IRR was done within the Roth 401k, both types of contributions are tracked as regular Roth IRA contributions (no conversions) per the 8606 Inst.

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