My wife's father died in June 2007 at age 62. At the time of his death he had a Roth IRA with American Funds. He had had the Roth for over five years at that point.
My wife filed the requisite beneficiary claim with American and they set up a Beneficiary Designated Account (BDA) for her. Once that was done she opened a BDA at Fidelity (which is where she wanted the money to ultimately end up) and transferred it over.
In 2008 she took her first MRD (she decided to take it over her whole lifetime instead of all within five years).
We've received the 1099-R from Fidelity reporting this. The code in Box 7 is T ("Roth distribution, exception applies") and the IRA box is checked. (Shouldn't that be a Q? Of course, Fidelity never asked for any account aging information so they have no way to know my father-in-law had the Roth for over five years when he died).
made persuant to the original owner's death and he had the account for over five years when he died. However, the tax software (UTS's TaxWise) is inserting an 8606 into the return, insisting the distribution is non-qualified, and adding it to income.
So how do I report this as a qualified distribution and make it drop out of income? That's a three-part question: (1) How would I report this if I were doing the return on paper? (2) Any happen to know how to properly report this in TaxWise? (3) Or do we have to argue at Fidelity and try to convince them to reissue the 1099-R with a Q instead of a T?
-- Rich Carreiro snipped-for-privacy@rlcarr.com