When one of these exceptions applies, your IRA custodian is required to indicate the exception by entering the appropriate exception-qualifying code in Box 7 Distribution code(s) of your 1099-R.

A 1099-R form uses a variety of numbered and lettered codes to indicate the type of distribution. They are entered in Box 7 on the form. A table of the codes is included in the instructions.

Let’s review the differences. Retirement accounts produce what’s known as a 1099-R. Yes, you guessed it – the “R” stands for retirement account. Because retirement accounts are tax ...