No 2010 1099-R code for Roth conversion?

Submitted by Anonymous on Tue, 2011-01-11 14:59

I expected but don’t see a new/different 1099-R “code” for 2010 Roth conversions in order to alert the IRS to the 2 year income spread

Am I missing something?

Thanks



Submitted by Edward Czapor on Tue, 2011-01-11 15:16

There is no need for a code since the 2 year income spread is automatic unless you opt out by checking the box on Form 8606. The decision is handled on Form 8606, and the IRS will know how you decide to be taxed from the form filed.



Submitted by Anonymous (not verified) on Tue, 2011-01-11 15:25

So my client who took a $300K RMD and made a $1M Roth conversion will recieve one 2010 1099-R showing $1.3M of taxable distributions with no indication of what portion can/will be spread into 2011 and 2012?



Submitted by Edward Czapor on Tue, 2011-01-11 15:37

That is correct, the taxable amount will be the 300K RMD, unless the decision is made to also tax the entire conversion in 2010 on Form 8606.



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