2008 Conversion Recharacterized in 2009: Value to Form 1040?
In 2009 I recharacterized 2 Roth IRA conversions back to a TIRA, one conversion done in 2008 (coded “R” in a 2009 1099-R) and another done in 2009 (coded “N “).
I am now using the TurboTax Deluxe online program for my 2009 tax return and expected to see both recharacterized values included in line 15a of the Form 1040 to reflect these 2 “distribution-transfers” from the Roth IRA. However, only the 2009 recharacterized value was shown. Correctly, neither value appeared in line 15b.
Q. 1: Is this correct or should line 15a of my 2009 Form 1040 include the recharacterized value of the 2008 conversion?
Q. 2: When a nontaxable IRA transfer takes place, the explanation “ROLLOVER” appears to the left of line 15. What term if any should appear to the left of line 15 to help explain why lines 15a and 15b are different amounts when that difference is due to a recharacterization?
Thank you in advance.
Permalink Submitted by Alan Spross on Tue, 2010-03-02 01:58
Q1 – I think both recharacterizations should be on 15a because they both occurred in 2009 and show on 2009 1099R forms. But don’t lose any sleep over this since 15a is not taxable AND the IRS has the 1099R forms showing the year these recharacterization apply to.
Q2 – There is no provision for a word entry. The only options are “Rollover”, “QCD” or “HFD”. Recharacterizations, particularly those done in a year not yet reported on a 1099R or 5498, are supposed to be summarized on an explanatory statement. There is nothing in the 1099R system that adequately covers partial vrs full recharacterizations and/or the varying values between the amount converted and the earnings adjustments that determine the different amounts recharacterized.
If TTax does not provide for an explanatory statement, in your case since the 1099R forms are there for both recharacterizations (I assume you reported the 2008 last year), and if you did full recharacterizations without major differences in values, you can likely forget the explanatory statement. I don’t think the IRS gets nearly the amount of statements that the instructions call for, so who knows what tolerances they have before an inquiry is made.