Conversion to Roth

[Earl]

A single participant plan has option for voluntary non-ded EE contributions. Guy makes first and immediately converts to Roth. So non-taxable event.

Is a 1099 required?

Code G with taxable amount = $0?

thank you

[ETA Consulting LLC]

Of course a Form 1099R is required. And yes, the total distribution would be in box one and the taxable amount of "zero" would be in box 2 since it is all basis. The Form 5498 produced by the Roth IRA would show that the deposit was actually added to a Roth. At the same time, you would use box 5 to show that the total amount in box 1 was "Employee" Contributions. So, box 1 - Total distribution. Box 2: Taxable amount of zero. Box 5: Same amount in Box 1. Box 7: G

That's how I would do it.

Good Luck!

[Earl]

Thanks. It is not going to an IRA. It's just an internal conversion. I think that's what threw me off.

[masteff]

Sounds like what you are describing is technically not a conversion, but rather is an in-plan Roth rollover.

http://www.irs.gov/pub/irs-drop/n-13-74.pdf

[Earl]

Thanks, the Notice is very helpful