Distribution Code letter for annuity cashed in in 2024 listed as traditional IRA - It is marked 7 IRA/fee simple

Forum|Forum|1 year ago
February 14, 2025
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I cashed in an annuity in 2024 listed as Traditional IRA. The 1099 R states disribution code as 7, IRA/Fee simple box checked. However it says I must add a letter A-M and I am not sure which one to check

dmertz

Employee

The IRA/SEP/SIMPLE box being marked on the Form 1099-R provided by the payer indicates a distribution from an IRA. No other code is permitted to accompany the code 7 in box 7.

"However it says I must add a letter A-M and I am not sure which one to check"

What is "it?" Codes A and M are not permitted to be in box 7 for a distribution from an IRA.

Are you asking in regard to something needed on a state tax return?

peggybollingerAuthor

No it’s for a federal return. I put in the info from the 1099R. Number 7 is 7 normal When I hit save and continue, it brings me to two boxes, one states please use the amount given in box to a as a taxable amount, or please ignore the taxable amount given inbox to a. I will complete for 8606. I am not sure which box to hit

dmertz

Employee

Enter the Form 1099-R exactly as received. On such a Form 1099-R, box 2a is required to be the same as the amount in box 1 and entered as such. If less than the full amount of a distribution from a traditional IRA (including a traditional IRA annuity such as yours) is taxable, that's determined on Form 8606.