Roth code J taxpayer under 59 1/2

[artp]

Taxpayer received 1099-R with Box 1 $1000, box 2 blank, box 2b checked and box 7 code J penalty applies, no known exception. $1000 in just part of original investment-no earning included. Best way to input this in software to show this to try to avoid IRS inquiry when not includable in come and not subject to early withdrawl penalty? 

[Slippery Pencil]

8606

[mcb39]

On 2/21/2024 at 1:19 PM, Slippery Pencil said:

8606

You have to.  Otherwise it populates as income even if you put zero in box 2.

[artp]

It turns out he had 2 Roth accounts with total contributions of $1950. He received 2 1099-Rs. The one for $1000 as originally stated and a 2nd 1099-R for $1766 marked total distribution. So for the 1st one nothing should be taxable, no penalty and for the 2nd $816 of income + penalty, right? For $1000 Form 8606 line 19 $1000 with Roth basis $1000; for $1766 Form 8606 $1766 line 19 with Roth basis $950. Software will take the $819 to 5329 and calculate 10% penalty.