1099-R Question

A husband and wife are participating in the same plan and they are each others' beneficiaries.  The wife dies in 2021 and the husband elects to 'roll over' her $40,000 benefit within the plan, that is, her benefit will now be shown as a segregated rollover account for him in the plan.  The resulting 1099 will show him as the recipient and use code 4G to show a death benefit that was rolled over.  The husband then terminates his employment and elects to roll over his $30,000 account balance and the new $40,000 rollover account into his IRA during 2021.  The 1099 for that rollover will show a gross distribution of $70,000 and show code G.  The 2 1099s will seem to show distributions totaling $110,000 for the husband as recipient when he only actually had $70,000 paid out.  Is this the correct way to report these transactions?

That's because there's no corresponding "form" showing the 40,000 rollover contribution INTO the plan.  I think your plan of action sounds sounds right.

(Imagine someone job-hopping and taking the same rollover account from plan to plan to, say, four companies within the same year.  His 1099s will certainly be way higher than his actual balance.)

This is the first time I've had this situation come up in a plan.  Thanks Bri for verifying.