How do I get TurboTax to fill out Form 8606? I am reporting a conversion of a IRA to Roth IRA, but the 1099-R box 7 uses code "G" instead of "7" so it's not working.

Forum|Forum|2 years ago
February 20, 2024
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The instructions for backdoor conversions trigger the contribution limits, so they don't work for this situation.

TurboTax Deluxe Online

Best answer by dmertz

Code G indicates a distribution that is not includible on Form 8606.

If in addition to having code G in box 7 the Form 1099-R has the IRA/SEP/SIMPLE box marked, the form is reporting a rollover from a traditional IRA to a traditional account in a 401(k), 403(b), 457(b) or the federal TSP, not to a Roth IRA. If the IRA/SEP/SIMPLE box is unmarked, the form is reporting a distribution from a 401(k), 403(b), 457(b) or the federal TSP and distributions from these types of accounts are not to be included on Form 8606 because they are not distributions from IRAs.

dmertzAnswer

Employee

Code G indicates a distribution that is not includible on Form 8606.

cscharyAuthor

I'm still confused. I know I need to pay taxes on the amount that was reported on the 1099-R ($40,000), even though it's termed a rollover and not a distribution. How is that reported in TurboTax? I think I did that through the questions about the 1099-R when I entered it, but the preview of the 1040 form shows the word "rollover" on line 5b and the amount listed to the right of that is nearly the same amount as was reported on line 5a - a lot more than what rolled over. What am I missing as to how this is handled in TurboTax and on my return?

mglauner

If you have a 1099-R with a Code G for a Rollover, when you enter this in TurboTax, you can indicate that you converted part of the distribution to a Roth IRA in the follow-up questions.

Per Expert @RaifH:

"To enter this correctly in TT Premier Online, it must be split into two separate 1099-Rs, one for the rollover to the traditional IRA and one for the conversion to a Roth. As long as the total and distribution codes match, this will not cause a problem:

Go to Federal > Wages & Income > Retirement Plans & Social Security > IRA, 401(k), Pension Plan Withdrawals (1099-R) and click Start / Revisit.
Add your 1099-R with all the information the same, except the distribution exactly as it is reported to you. If you have a taxable amount in Box 2a, include that on the Roth conversion. If taxable amount not determined is checked, it is okay to keep that checked for both distributions. Start with the portion that you converted to a traditional IRA.
Confirm whether or not the IRA/SEP/Simple box is checked.
After a few more screens, Tell us if you moved the money through a rollover or conversion select I rolled over some or all of it to an IRA or other retirement account within the time limits (normally 60 days) for the portion that you rolled over into a traditional IRA.
Confirm the entire amount was rolled over. You should not be taxed on the rollover.
Repeat with the portion of the distribution that was converted to a Roth IRA. After entering the information and going through the same few screens, select I converted some or all of it to a Roth IRA and confirm you converted the entire amount.
You will be taxed on the Roth conversion but will not pay the additional penalty for an early withdrawal."