Message Font: Serif | Sans-Serif
No. of Recommendations: 0
<< In 1998 I started a new Roth IRA (no conversion), and deposited my $2000. In January 1999, I made another $2000 contribution for the year 1999.

When filing my taxes in 1999 for 1998 I realized I exceeded the max AGI for a Roth. On April 1, 1999 the entire balance was recharacterized to a regular IRA. I filed form 8606 with my 1998 taxes for the $2000 contributed to the Roth in 1998.

In January 2000, I received a 1999 1099-R for the entire amount of the Roth recharacterization. The sum includes my 1998 and 1999 contributions and gains.

Now I'm not sure how to handle this 1099-R in my taxes. How do I report this gross distribution when part of it was for 1998 and part in 1999? Remember, I recharacterized prior to April 15, 1999. Do I simply ignore this 1099-R and report a regular IRA contrinution of $2000 for 1999? >>

First the really important part, with reference to Form 1040 line numbers. On 15a, put the gross amount from the 1099-R; on 15b, put -0-.

You need to do Form 8606 to report the recharacterization of your 1999 contribution, just like you did for your 1998 contribution on your 1998 return. Read the instructions carefully. This may be one of those situations where you attach an explanation.

Phil Marti
Tax Preparer
Print the post  


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.