1099-r Code Q

[gman]

Distributions for a Roth. E Jones shows amount in box 1 and nothing in box 2. Roths not taxable if qualificatons are met. The taxable amount not determined box is checked

So non taxabe if code Q??

[ChEAr$]

Distributions for a Roth. E Jones shows amount in box 1 and nothing in box 2. Roths not taxable if qualificatons are met. The taxable amount not determined box is checked

So non taxabe if code Q??

Qualifications are outlined in publication 590 which see.

[gman]

normal

Is that normal for code roth distribution to have the taxable amount not determined box checked.
It is up to the taxpayer to decide if they qualify for tax free treatment. I doubt they will remember what date they put into the roth??

[Burke]

My software has a box for the date first put into ROTH on the 1099-R screen. It should be no big deal for the TP to find out from the bank or custodian that has the account when it was first opened.

[RitaB]

To be honest

Is that normal for code roth distribution to have the taxable amount not determined box checked.
It is up to the taxpayer to decide if they qualify for tax free treatment. I doubt they will remember what date they put into the roth??

To be honest, I think it's pretty common for codes to be incorrect. The issuer specializes in selling investments, not proper code selection upon withdrawal. I see a lot of incorrect codes. That's why God made Form 5329, for example. Got one guy in his 80's, and I am still filing 5329 explaining that it's not an early distribution. Wonder if they will still put a "1" when he dies.

[Gary2]

Is that normal for code roth distribution to have the taxable amount not determined box checked.
It is up to the taxpayer to decide if they qualify for tax free treatment. I doubt they will remember what date they put into the roth??

The instructions for Form 1099-R say that distributions from a Roth IRA should always have the "Taxable amount not determined" box checked, and box 2a should be blank.

[joanmcq]

All IRAs have that designation. How does the custodian know when the client opened their first Roth? Or if they made nondeductible contributions to a traditional IRA? Or if they had after-tax contributions to a rolled over pension? Or how many other IRAs or Roths they may have?

[gman]

so

so does the IRS know when it was opened and if any penalty applies?

[Gary2]

The IRS doesn't know everything, they just want you to think they do.

But in this case, a) the code Q is the issuer's statement that they believe all the requirements have been met for the distribution to be non-taxable; and b) there should be a 5498 history to back that up.

In order to use code Q, the issuer must know that the owner is over 59 1/2 (or disabled or deceased), and that the account has been around for at least five years. In the absence of actual knowledge to the contrary, I see no reason to second guess them.