Converting a Traditional IRA to an IRA Roth and the Tax Implications

Forum|Forum|8 years ago
March 28, 2018
3 replies
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I am 82 years old. About 20 years ago I converted to a Roth IRA. Last year I sold mutual funds in my Roth and withdrew the proceeds ($40,000). My 1099-R indicated it as “Taxable amount not determined”, Distrbution Code “T”. I assumed this withdrawal was nontaxable income. Turbo Tax Included the amount in my taxable income. I cannot seem to follow the reason why.

Is my withdrawal taxable?

Retirement Accounts

P

PaulaM

Employee

After you enter the 1099-R, you will need to continue to answer the follow up questions in the section. You will be entering your previous years Roth IRA conversion (basis). After you complete this information, the amount should not be taxable.

You can verify by selecting (online versions) Tax Tools, Tools, then View my Tax Summary. Then select Preview my 1040 on the left black panel. The IRA distribution should be reported on line 15a and the taxable amount of 0 on line 15b.

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D

D logan

Turbo downloaded mutual roth funds from schwab which were sold but taxed? WHY

R

RobertB4444

You should be able to go through the questions after you enter the 1099-R showing the mutual fund sale and tell the system the basis that you had in the Roth and it should stop showing as taxable @D logan.

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