Goodcat, you have referred several times to "the broker," and it seems to be rather evident that said broker does not understand the IRA eligibility rules very well. I'm assuming, of course, that YOU have given us correct information in your own posts about this.
The broker is not the IRA trustee. He may be an employee of the trustee, but he is not the trustee itself. IRA trustees are corporations, and I suggest that you or your client get in touch with someone else who works directly in the IRA department of that trustee. Explain what happened, and I suspect that everything can get straightened out. The best outcome would be for the funds to be returned to the W's IRA, as a correction/reinstatement, with no 1099-R being issued at all. If the trustee is unable or unwilling to do this, then I would roll the funds over into an IRA somewhere else ... as long as the 60-day time limit hasn't expired.
Having said this, I must add that the facts as you have described them don't pass my "smell test." Maybe it's really just a woefully inept broker, but I wonder if there is more you haven't told us, perhaps regarding some key fact of which you are not aware. It's difficult to understand how any broker or trustee would do what you have described.
I hope your clients gets it straightened out to their satisfaction.
The broker is not the IRA trustee. He may be an employee of the trustee, but he is not the trustee itself. IRA trustees are corporations, and I suggest that you or your client get in touch with someone else who works directly in the IRA department of that trustee. Explain what happened, and I suspect that everything can get straightened out. The best outcome would be for the funds to be returned to the W's IRA, as a correction/reinstatement, with no 1099-R being issued at all. If the trustee is unable or unwilling to do this, then I would roll the funds over into an IRA somewhere else ... as long as the 60-day time limit hasn't expired.
Having said this, I must add that the facts as you have described them don't pass my "smell test." Maybe it's really just a woefully inept broker, but I wonder if there is more you haven't told us, perhaps regarding some key fact of which you are not aware. It's difficult to understand how any broker or trustee would do what you have described.
I hope your clients gets it straightened out to their satisfaction.
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