401k excess ......

[BOB W]

..... I rec'd 2 1099Rs, one with a code 8 and the other with a code P. Code P says it is for 2004 and code 8 is for 2005. Both 1099R are 2005 1099s.

From what I have read I may have to amend 2004 for the code P. Is this correct? (do not include on the 2005 return?) Is there any way to avoid the penalties?

This client has also rec'd another excess distribution on March 15, 2006 for the year 2005. a 1099 will be issued in 2006 to be carried back to 2005. Should I just include this income on line 21 while I'm doing his 2005 tax return.


Thank for your help.

Bob W

[S T]

1099R corrections

Code P yes you have to file an amended for prior year. Could be subject to 10% penalty for earnings.

Code 8 I believe you go ahead and include on the 2005 tax return. If they have the notice that one will be issued in 2006, I believe if the excess is received prior to 4/15, then you can include on the 2005 tax return, so you won't have to prepare an amended return. The 1099R will be issued probably with a Code P.

Sandy

[BOB W]

Thanks Sandy..

.. for your confirmation. (The cutoff date is March 15.) Thanks again for your help........