Question

Roth IRA

Forum|Forum|2 years ago
February 29, 2024
2 replies
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At the age of 64 I made a Roth IRA withdrawal. The 1099-R I received from Fidelity has the taxable income, box 2a, as 0, Box 5 states Roth contribution is equal with distribution, and box 7 is filled with "B" which indicates a Roth distribution.

The IRS wants to tax the distribution saying they can't determine if the distribution is a pension or an annuity.

Having sent a couple explanatory responses I am now going to call them.

Any thoughts on why the IRS is not seeing this as a nontaxable Roth distribution?

JohnB5677

Everything you said sounds like it is posted correctly.

Box 7 Code B is Designated Roth account distribution

Did you check the box that says IRA/SEP/SIMPLE

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S

stephan5Author

The IRA/SEP SIMPLE box is blank

D

dmertz

Employee

This is NOT a distribution from a Roth IRA. It is a distribution from a designated Roth account in an employer plan like a 401(k).

The taxable amount of this distribution is the amount in box 2a of this Form 1099-R, $0.

"The IRS wants to tax the distribution saying they can't determine if the distribution is a pension or an annuity."

It makes no sense that the IRS would question this distribution. The code B and the amount shown in box 2a tells the IRS everything they need to know about this distribution to determine that it is nontaxable income. Apparently whoever at the IRS questioned this distribution is inexperienced or inadequately trained. The type of investment that was held in the designated Roth account is irrelevant to the tax treatment.