The taxable amnt on my 1099_R is not correct. How do I handle this with IRS? See details below.?

Question

I withdrew money from my traditional ira and within 60 days put part of the money withdrawn back into a Roth ira. When I got my 1099-r from my custodian, it showed the total amount withdrawn from my traditional ira as "taxable". When I asked them to subtract the amount returned to the Roth ira, they said that the Irs required the to show the total amount as taxable. How can I handle this when filling out my tax forms without having problems with IRS relating to the total amount being shown as taxable.

Answer 1

It's all taxable. You can't roll traditional IRA money into a Roth IRA without paying the tax. However, you can avoid the penalty since you are converting your Traditional IRA to a ROTH, but not sure it's possible to just do a "partial". You probably need to deposit ALL of that $ into a Roth to avoid the penalty (early withdrawal).

However, either way, you HAVE to pay the tax on it.

Traditional IRA = Pretax money
Roth IRA = after tax money

Answer 2

Putting it into the ROTH didn't change the taxable aspect of the distribution. Had you put it into a traditional IRA (tax deferred) then you could have also supplied the IRS with the forms showing the deposit...but you chose to put the money into an AFTER TAX account....and thus you are now subject to tax.

Either way the IRA company is required to show what they did with the money not what you did with it after the fact. Only way they should change it is if you actually did a direct rollover. But that didn't happen.

The 1099-R is correct and because you put it into a ROTH the entire amount IS taxable.

Answer 3

The first 3 answers are correct, but they ignore 1 thing.

There is a 10% penalty for early withdrawal of 401k/IRA type money. There is a way to convert it to a Roth IRA without paying the penalty. I'm not sure if the way you did it, with holding the money for some amount of days close to 60 days qualifies. A direct rollover would probably have qualified.

Answer 4

Any apologist can purely supply almost as good of an answer they could create, for this reason they're restricted because they do no longer have the direct connection to God for an answer. definite that is a contradiction yet then there are a selection of. common like maximum religions, they're unable to work out the finished image. the different element i have observed is that maximum have the purely objective of helping those which already have the religion, for this reason they don't assume follow up questions or a real communicate. faith teaches human beings to no longer ask questions yet to have self belief by ability of unquestioning faith.

Answer 5

it is taxable-- the roth will take into account the contribution only. Whom ever told you different is an idiot!