How to Code the 1099-R (After Tax $ converted to Roth)

[AllThingsForGood]

Good morning. I have a client (1 ee plan) who rolled INTO the Plan aftertax money. To establish basis within his Plan, I'm preparing a 1099-R showing the after-tax amount as being 'converted' to Roth inside the Plan.

Can you please tell me if I'm thinking right about the 1099-R?

Box 1, the amount that came in is shown ($30k). Box 2a, taxable amount $0. Box 7 - H (what else could this code be? is H right?)

 

Thanks !

[Paul I]

It would help to have clarity on exactly what is being reported.  Are you preparing a 1099-R for:

• the plan from which the after-tax money was moved into a receiving plan,
• OR for a plan where an in-plan rollover was made from an after-tax account into a Roth account,
• OR something else?

[AllThingsForGood]

The After Tax money came IN to my client's solo-401k plan. The financial advisor wants record of its basis ($30k), so wants a 1099-R prepared showing the AT money being converted, inside my client's solo-401k plan, to Roth.

I have never had this circumstance, and even questioned the necessity of a 1099-R at all. 

Is a 1099-R necessary? (Might should have been my first question) If NOT, is there any reporting necessary from the solo-k plan?

[Paul I]

From where did this money come from? Was the after-tax money a contribution into your client's plan or was it a rollover into your client's plan from another qualified plan, or from somewhere else?

Once the after-tax money was inside your client's plan, that after-tax account should have had a tax basis associated with it.  This would then get to next question about when was or will the after-tax account was/is being converted to Roth?

[AllThingsForGood]

The AT money is a contribution to my client's plan. (I said "rollover" in my initial posted question - sorry!)

The deposit of $30k is the amount being 'converted' to Roth, inside the 401k plan. It's being considered converting on the date of deposit so there are no gains associated with that basis.