On-line rollover classification error

Taxpayer was trying to do a trustee to trustee rollover from one IRA account to another IRA account. He accidentally transferred the account to a Roth IRA. He immediately recognized his mistake and contacted the broker who transferred the funds to his IRA account. The broker told him they would treat the miscategorized transfer as if it had been transferred to his IRA, but they then issued a 1099-R with a G code showing that the entire amount is taxable. The taxpayer died shortly after the trustee to trustee transfer took place. Should he report the entire amount as taxable and then back the amount back out again?



The G code makes no sense for any IRA to IRA transfer, and the broker likely had no authority to essentially recharacterize a Roth conversion for which the custodian made no error. Was a qualified plan involved in this sequence, or might the G code reflect another non related direct rollover? Seems like there has been a series of errors and miscommunications here which will be very difficult to unwind. Account statements should be examined to determine actual money movements to determine if this or any other 1099R form are correct. 



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