Question

Portion of Roth IRA Rollover Put Back into Traditional IRA within 60-day Window

Forum|Forum|3 years ago
March 14, 2023
3 replies
0 views

I rolled over funds from a Traditional IRA to a Roth IRA and then within the 60-day window put half of the funds back into a Traditional IRA. I can't find a way to record this in TT. I have a Form 5498 showing that only half the funds rolled over to a Roth IRA, but this form isn't entered into TT. Where can I enter the information that half of the money was put into a Traditional IRA within 60 days and therefore not taxable?

H

HelenC12

When you move convert Traditional IRA money into a Roth IRA, that money is taxable. A Traditional IRA rollover is not taxable if completed within 60 days.

Please see the following information:

Edit your 1099-R
Continue with the onscreen interview until you get to the Tell us if you moved the money through a rollover or conversion screen. Select I did a combination of rollover over and converting some or all of this money and Continue.
On the Separate your rollover and conversion screen, TurboTax will inform you that Rollovers and conversions need to be treated as separate transactions in TurboTax in order for them to be reported accurately.
First, remove this 1099-R so you can report separate transactions.
Then, split your 1099-R into two 1099-Rs, one for rollover and one for the conversion.
Allocate the numbers on your actual 1099-R between the two new 1099-Rs so that the combined total of them equals the amount on your original 1099-R.
Once you've entered two separate 1099-Rs you can indicate the amount that you rolled over or converted for each one.
Continue with the onscreen interview until complete.

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fanfare

Employee

"I rolled over funds from a Traditional IRA to a Roth IRA "

did you put half the funds into your Roth and held back the other half for return to IRA?
funds converted to Roth cannot go back to the Traditional IRA, in whole or in part.

@MLTKJohnso

M

MLTKJohnsoAuthor

The funds were withdrawn from the traditional IRA at two different dates. Both went directly into a Roth IRA. I was told there is a 60-day window to change your mind and put the funds back into a Traditional IRA. I withdrew the funds from a Traditional Thrift Savings Plan account and since TSP won't let you put funds back, I rolled them over to a new Traditional IRA account.

D

dmertz

Employee

None of this makes any sense.

"Both went directly into a Roth IRA."

That assertion does not seem to be supported by the Form 5498 that you have mentioned.

"I was told there is a 60-day window to change your mind and put the funds back into a Traditional IRA."

That would be true only if you had not "rolled over" to a Roth IRA (i.e. converted to Roth) the distribution from the traditional IRA.

It would probably help if you were more specific about the number of the box on the Form 5498 from the Roth IRA shows half of the total amount that was distributed from the traditional IRA.

A rollover from a traditional IRA to a Roth IRA constitutes a Roth conversion and Roth conversions are not permitted to be undone. It almost seems like the Roth IRA custodian treated one of the deposits as a trustee-to-trustee transfer from another Roth IRA, which conflicts with what you have described as the transactions that actually occurred. Another possibility is that you took a taxable distribution from the traditional IRA and used that money to fund a new Roth IRA contribution, but that's not a rollover. Knowing exactly what box on the Form 5498 shows half of the amount distributed from the traditional IRA would help to identify what actually happened.

I think that you are saying that the traditional IRA was established by a rollover from the federal TSP, but that's not germane to the subsequent distributions from the traditional IRA.

D

dmertz

Employee

You said that the Form 5498 that you mentioned shows a rollover (box 2), so that suggests that it's Form 5498 from the traditional IRA, not the Form 5498 from the Roth IRA that would show an amount of a Roth conversion contribution (box 3). Does the Form 5498 from the Roth IRA show the full amount (not half) in box 3?

Do you have a Form 1099-R showing a distribution from the Roth IRA? If so, what is the code in box 7?