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  • Help need on roth IRA rollover.

    I did the backdoor roth IRA conversion but Vanguard says that I won't get a 1099-r. I must have whiffed somewhere huge along the way unless vanguard made a mistake. This is the first time I've attempted this including my first time opening accounts with vanguard. I thought that when I did the roth conversion (aka recharacterization) that I would receive a 1099, but they are saying that I only receive a 5498. This is the message I received from vanguard customer service.

    "Vanguard reports all IRA distributions on IRS Form 1099-R. It looks like you have not taken any distributions from either your Roth or traditional IRA for the 2020 tax year, therefore, you will not receive a Form 1099-R for the 2020 tax year.
    However, when you make a contribution, process an incoming direct rollover, complete a Roth conversion or recharacterization within your Vanguard IRA, you'll receive IRS Form 5498.
    After reviewing your account, we can confirm that you made contributions for the 2020 tax year."

    Any ideas of why I didn't get a 1099? I want it so that I can fill out form 8606 and complete the roth conversion. Thanks in advance

  • #2
    The step where you convert (not recharacterize) from a traditional IRA to a Roth IRA will need to generate a 1099-R in the year that the conversion is done. As you report, Vanguard stated "It looks like you have not taken any distributions..." This implies you have not made a conversion so no 1099-R.

    Did you make a conversion?

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    • #3
      The conversion is reported on Form 1099R in the calendar year in which it is done. It has absolutely no relationship to the tax year of the contribution to the TIRA. The $$ in your TIRA is fungible and conversions might involve several years.

      So, for example, if you contribute to a TIRA for both 2020 and 2021 on Monday (Feb 1) and convert the full balance at any time before 1/1/22:
      • You will report a TIRA contribution on your 2020 Form 8606.
        • You will receive no 1099R
      • You will report a TIRA contribution on your 2021 Form 8606.
        • You will receive a 2021 1099R.
      • You will report a Roth conversion on your 2021 Form 8606. Any growth in the TIRA balance will be shown on the 1099R and will be taxed on your 2021 Form 1040 (and state, if applicable).
      Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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