Re: Reporting IRA rollovers
- From: kamlet@xxxxxxxxx (Arthur Kamlet)
- Date: Fri, 27 Mar 2009 02:29:16 +0000 (UTC)
In article <5IPyl.20903$v8.4039@xxxxxxxxxxxxxxxxxxxxxx>,
Paul Thomas, CPA <paulthomascpapc@xxxxxxxxxxxxx> wrote:
"Rick" <Rick@xxxxxxxxxxxxxxx> wrote
When you withdraw money from an IRA, what determines
whether box 7 is coded as a "1" or a "7"?
Generally your age at the time of the distribution.
"7" is a normal distribution.
"1" is an early distribution with no known exception.
Right.
Do they code it as a "1" if a check is actually sent to the customer and a
"7" if it is sent directly to
another institution?
Qualified transfers to another institution generate a "6" or a "G".
A code 6 is a direct tranfer from one annuitu manager to another.
The Pub says you need not even report a code 6 on your 1040.
Or does it depend on how the check is made out?
What matters most is what actually happened.
If you end up depositing the money in another IRA account at
another institution within 60 days and you properly report it on
the 1040 on line 15a as a rollover, does it matter what was in
box 7?
In a direct transfer the IRA is not so likely to poke around
to verify it happened. In a rollover you handled yourself,
there are questions of whether it happened, whether it happened
within 60 days, whether it happened more than once in 12 months
for either the old or new account and in general is more of a
red flag.
In the long run, no. Distributions can, and often are coded with a "1", and
they get deposited into another qualified plan by the individual.
Understand that the receiving institution will report to the IRS that they
received $X from your as a rollover. The received amounts should match up
with the distributed "6" or "G" amounts and any other distributiosn that you
told the IRS that you rolled into a qualified plan.
Again, code 6 you don't have to report and I have no idea why they
still want code G to be reported.
BTW a direct IRA to IRA custodian transfer should not generate a 1099.
--
ArtKamlet at a o l dot c o m Columbus OH K2PZH
.
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