Solved

IRA withdrawal & return of funds

Forum|Forum|5 years ago
February 26, 2021
1 reply
0 views

I withdrew funds from an IRA to buy a house. Subsequently, I sold existing home & returned same amount to the IRA in 33 days. The 1099R shows the amount as taxable income on line 2a with Taxable income not determined checked on line 2b. How do I provide information to IRS to make the case that it is not taxable?

IRA

Best answer by MinhT1

AS you returned the funds to the same account within 60 days, this is considered as a rollover and the amount returned is not taxable. This is how to enter the rollover in TurboTax:

Enter your form 1099-R normally.
After entering your form 1099-R, click Continue until you reach the screen Tell us if you moved the money through a rollover or conversion.
Check the radio button which corresponds to your situation then click Continue and follow the interview.
Enter the amount you repaid and it will be excluded from taxation.
You will still have the full credit of taxes withheld on your form 1099-R (if any).

M

MinhT1Answer

AS you returned the funds to the same account within 60 days, this is considered as a rollover and the amount returned is not taxable. This is how to enter the rollover in TurboTax:

Enter your form 1099-R normally.
After entering your form 1099-R, click Continue until you reach the screen Tell us if you moved the money through a rollover or conversion.
Check the radio button which corresponds to your situation then click Continue and follow the interview.
Enter the amount you repaid and it will be excluded from taxation.
You will still have the full credit of taxes withheld on your form 1099-R (if any).