Roth Ira

[S T]

I have a taxpayer that turned 59.5 in 2008.

Opened a Roth IRA in July 2006, total contributions 2006 - 2008 equaled $13, 822, taxpayer received a total distribution of 12,490 box 1 of 1099R form, box 2 - taxable equals zero, taxable amount not determined, code "T" . Company is showing contributions as $4,569 in box 5, which is only the contribution amount in 2008. Is this going to present a problem?

Where to report, is it form 8606 part III, and since distribution is all from contributions, there is no taxable amount and no penalty?

Can the taxpayer also take a loss on Schedule A?

Thanks

Sandy

[BHoffman]

I have a taxpayer that turned 59.5 in 2008.

Opened a Roth IRA in July 2006, total contributions 2006 - 2008 equaled $13, 822, taxpayer received a total distribution of 12,490 box 1 of 1099R form, box 2 - taxable equals zero, taxable amount not determined, code "T" . Company is showing contributions as $4,569 in box 5, which is only the contribution amount in 2008. Is this going to present a problem?

Where to report, is it form 8606 part III, and since distribution is all from contributions, there is no taxable amount and no penalty?

Can the taxpayer also take a loss on Schedule A?

Thanks

Sandy

Hi Sandy - If it's a total distribution, then you can report the loss on Sch A.

Contributions can be distributed tax-free and penalty-free. The only taxable portion of a Roth consists of the earnings. I don't think it matters who contributed the basis.

Fill out 8606 part III, like you said.

[S T]

Total Distribution

Thanks BH,

Box 5 is not showing the total contributions, only the contribution made in 2008, is that going to present an issue?

We have another print out for the total contributions from the company.

Sandy

[BHoffman]

Thanks BH,

Box 5 is not showing the total contributions, only the contribution made in 2008, is that going to present an issue?

We have another print out for the total contributions from the company.

Sandy

Box 5 is not going to cause a problem. Only amounts contributed during the tax year are supposed to appear there.

The only trick is to make sure you are not counting any of the earnings as contributions.

This is actually as easy as it seems

[Gretel]

I agree with both of you if this is the only Roth he has.