Rollover Coded Incorrectly

Submitted by Kevin O'Hearn on Mon, 2023-02-27 21:27

Hello, I have a client who submitted paperwork in August 2022 to to process a rollover to another custodian. The client filled out the paperwork incorrectly and check off “Normal Distribution” and the check was sent to the new custodian. My back office is reporting it as an aged based distribution on the 2022 1099R however the new custodian is treating it as a trustee to trustee transfer so no 5498 was generated.

I’m having a hard time getting my back office to change the coding of an age based distribution on the 1099R. Do you have any suggestions or thoughts on how this should be reported?

Thank you.



Submitted by Alan - IRA critic on Mon, 2023-02-27 22:10

  • If the check was sent directly to the new custodian, it is a non reportable direct transfer even though that is inconsistent with the client submitted instructions. The back office should report based on how they actually disbursed the funds. 
  • Any 5498 would not be issued until May, but if not issued at all the 1099R without a 5498 will be a mismatch at the IRS. What does the new custodian’s statement of activity last summer show, rollover or transfer? Remember, if this is reported as a distribution and rollover, client will be locked out of another 60 day rollover until August.

Add new comment

Log in or register to post comments