taxpayer made an ineligible contribution to ira, they have no earned income. told them they have to withdraw the contribution and earnings by april 17. ira trustee told them the distribution will be taxable to them next year. can't find what code should be on the 1099r for next year to indicated that this is a corrective distribution. obviously it would not be taxable to them next year(other than earnings) but can't seem to nail down how it would be reported. any help?
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When was the contribution madeEverybody should pay his income tax with a smile. I tried it, but they wanted cash -
in 2005
their return has not been done yet and it will not be deducted.Comment
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ineligible IRA Contri.
It can be withdrawn prior to 04/15/06 without any tax consequences.. Any interest earned would be taxable on the 2006 return.Comment
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how is it reported next year
i would assume they will get a 1099r in 2006 with a code for corrective distribution? what is the code?Comment
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Once it is reversed it will be a regular investment with the interest showing on 1099INTOriginally posted by theresa dEverybody should pay his income tax with a smile. I tried it, but they wanted cashComment
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thanks
everyone. had a couple of annoying returns today. need a couple of nice easy ones for this tired brain.Comment
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