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Did Not Do Trustee to Trustee Rollover

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    Did Not Do Trustee to Trustee Rollover

    Client received money from IRA and later within 60 days re-deposited in an IRA account. If this is not reported on the 1040, does the IRS get reports from the banks about rollovers received and do a match?
    Will the client eventually get a notice from IRS

    #2
    Yes. Report it. Why would you consider not reporting it. You don't want your client to get an IRS letter.

    Comment


      #3
      I don't quite understand your question.

      The withdrawal itself gets reported on a Form 1099-R, and that information must appear on the tax return. Always.

      If there was a direct institution-to-institution rollover, usually supported by code "G" on the Form 1099-R, you enter that and report zero taxable.

      If there was not a direct transfer, BUT the client met the guidelines for moving all withdrawn funds (beware of income tax withholding!) to a new custodian, enter that information in your software. The taxable amount will then show as zero and the word "ROLLOVER" will be added to line 15 on Form 1040.

      FE

      Comment


        #4
        Husband was taking RMD from IRA. He died spouse inherited. Spouse gets money in her hands. Takes it to another bank and puts it back into an ira for her and then takes her RMD from it. 1099r shows total distribution from Husband with code 4. MY thinking and reading is this is still ok? Thus no tax on the full distribution.

        Comment


          #5
          Correct. Spouse is allowed full rollover to her IRA. Did he take his RMD in the year he died?

          Comment


            #6
            Yes he had taken his RMD already and bank advised spouse that she should also take one. She of course did. Thank you for an answer.

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