New (tax) year, new help!

Fixed Assets and UltraTax CS 2023 help is now on Help and Support. We're still moving articles, but you can find most content for the 2023 tax year there. Continue using the Help & How-To Center for tax years 2022 and older.

Question

What are the general reporting requirements for Roth IRA distributions, conversions, or recharacterizations?

Answer

Refer to Form 1099-R, Form 5498, and Form 8606 instructions, and IRS Publications 590-A and 590-B for exact reporting requirements. In addition, IRS Notices 98-50 and 1998-39 I.R.B. provide additional information about Roth IRA distributions, contributions, and recharacterizations.

In general, from the 2022 Form 1099-R instructions:

• For distributions from a Roth IRA, report the gross distribution in box 1 but generally leave box 2a blank. Mark the Taxable amount not determined checkbox in 2b. Use code J, T, or Q as appropriate in box 7. It is not necessary to enter X in the IRA/SEP/SIMPLE checkbox.
• For distributions of excess Roth IRA contributions, report the gross distribution in box 1 and only the earnings in box 2a. Enter code 8 or P as appropriate in box 7. Enter X in the IRA/SEP/SIMPLE checkbox.
• For IRA conversions to a Roth IRA, report the total amount converted in box 1 and box 2a. For a Roth conversion, use code 2 in box 7 if the participant is under age 59 1/2, or code 7 if the participant is at least 59 1/2. Do not use code J. Also, enter X in the IRA/SEP/SIMPLE checkbox in box 7.
• For a prior-year IRA recharacterization, enter the fair market value of the amount recharacterized in box 1, 0 (zero) in box 2a, and Code R in box 7. It is not necessary to enter X in the IRA/SEP/SIMPLE checkbox.
• For a current-year IRA recharacterization, enter the fair market value of the amount recharacterized in box 1, 0 (zero) in box 2a, and Code N in box 7. It is not necessary to enter X in the IRA/SEP/SIMPLE checkbox.

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