Hi Mel, >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Larry had an IRA account at PNC Bank which we closed and rolled over into an IRA account at Wildfire CU in May. The check was made out to him, for the full amount, with no taxes withheld, and was designated as a normal distribution. This check, which amounted to the original amount and the interest earned, was then taken to Wildfire CU and placed into an IRA account, which Wildfire CU says is designated as a rollover account. This was done within 48 hours of receiving the check
We have received a 1099-R from PNC showing box 1 (gross distribution) and box 2a (taxable amount) to be the same -- the full amount of the account. It also shows box 7 (distribution code) as 7 and IRA/SEP/SIMPLE (also box 7) is marked with an X. When we enter these figures from the 1099-R into the TurboTax, even though we answer yes to the question that it was rolled over, the total gross distribution figure (Larry's retirement and the RMDs we took out of his IRAs this past year) is increased by the full amount of this account. So the IRS would assume that we took this money out instead of rolling it over.
How do they handle this so that NO additional tax is owed? >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Mel