RMD Waived for 2020 Due to CARES ACT
Taxpayer waived their RMD for 2020 due to the CARES ACT and returned the distribution. However form 1099-R reflects distribution code “7” – normal distribution? Client rolled the distribution back to the financial institution but box 2a of 1099-R reflects taxable amount of original distribution. Do we change the code to “G” rollover and hope the IRS agrees with us or is there something else we need to do?
Permalink Submitted by Alan - IRA critic on Sat, 2021-04-03 16:24
This is to be reported like any other distribution and rollover on line 4 or 5 (depending on the type of distributing plan) of Form 1040. with “rollover” shown next to the b line. The rollback is also exempt from the one rollover limitation if the distribution was from an IRA. The distribution should be entered as issued with code 7.