1099r

[RNuse09]

I know there is a 10% penalty for a distrubution before 59.5. Is it in the calendar year in which the taxpayer turns 59.5 or when the taxpayer actually turns 59.5

Thanks for any reponses.

[WhiteOleander]

The taxpayer must be 59 1/2 before the distribution is taken.

[S T]

Distribution

This was posted on the Ed Slott IRA Discussion Forum

Taxpayer must actually reach the exact day they turn 59.5 in order to eliminate the early withdrawal penalty. The IRA custodian has the date of birth and will code any distribution prior to half birthday as early. If the taxpayer takes out money both before and after the half birthday, they will get two 1099R forms, one coded early and one coded as a normal distribution. Age 59.5 is defined as exactly 6 months following the 59th birthday. It is not necessary to count the days in each month.

Sandy

[taxmom34]

1099r

for IRA distribution or 401K? i think for 401K it could be age 55, one of the exceptions to avoid penalties?

[RNuse09]

1099r

I agree that there should be two 1099rs based on logic alone. But I can't find it anywhere on the irs website. When I called the IRS, an agent told me that there would be only one 1099r. Does anyone have anything right from the IRS? Thanks again for the help.

[Gary2]

I agree that there should be two 1099rs based on logic alone. But I can't find it anywhere on the irs website. When I called the IRS, an agent told me that there would be only one 1099r. Does anyone have anything right from the IRS? Thanks again for the help.

See the instructions for forms 1099-R and 5498, on page 12, under Box 7, the caution paragraph in italics which gives this precise example.

I've never seen an issuer actually provide two 1099-Rs for either this case (nor in the case of someone getting a disability pension in the year of reaching minimum retirement age). In this case, you'll have to do the math yourself and include Form 5329 using code 12.

[ChEAr$]

I remember one case in which client took about 10 distributions, say 5 before 59.5 and 5 afterwards. He got 10 1099r forms, all correctly marked either with a 1 or 7.
(or was it a 2?)
hmm..

[JohnH]

Just hope it wasn't a "4", and issued to someone else...

[ChEAr$]

Just hope it wasn't a "4", and issued to someone else...

Nope, he's still alive and kicking. I amended his return (he had some questions about previous preparer) and gained a client for life; His or mine, whichever, whichever, depending.

[Burke]

for IRA distribution or 401K? i think for 401K it could be age 55, one of the exceptions to avoid penalties?

From a qualified pension plan (other than an IRA) if you take the distribution AFTER your separation from service in or after the year you reach age 55, yes. For qualified public safety employees, after age 50, using the same separation from service criteria. (police, fire, EMT's working for a state or municipality).