Reporting IRA rollover on tax return

[ttbtaxes]

Client receives a check from the IRA of deceased spouse and within 60 days rolls it over into her own IRA. Of course, she receives a 1099-R reporting all of it as taxable and, of course, none of it will appear taxable on her tax return.

Do you do anything special, from a disclosure perspective, with the return to help convince the IRS this was a rollover and done within 60 days? Do you attach copies of the check received and the deposit into her IRA? Do you do nothing other than show it non-taxable?

[Roland Slugg]

Do you do anything special, from a disclosure perspective, with the return to help convince the IRS this was a rollover?

Yes. I enter the word "ROLLOVER" on the dotted line next to box 15b. Actually, my tax prep software does it for me automatically. All I do is enter the rolled-over amount on the 1099-R input screen.

[FEDUKE404]

Rollover decisions

As Roland Slugg stated, I do nothng more than enter the Form 1099-R information showing a "distribution."

After that, and **IF** the client fulfilled the IRS criteria for allowing a rollover, my software has a box to check, including entering the $ amount rolled over, and the magic word "ROLLOVER" automatically appears on line 15 with the number in the right-hand column of the Form 1040 adjusted accordingly.

Issues of concern: 1) The "date of the check" is not necessarily the start of the 60-day clock and 2) If taxes were withheld and "everything" was rolled over, there could be amounts (total of withholding) from the original distribution that were NOT rolled over, hence an unexpected taxable event.

Just be sure you have all of the facts. . . .

FE

[Twin Turbo Z]

I always attach a copy of the 5498 if available. And attach a note stating the amount was rolled over onto a qualified plan, in a timely manner. Also in that note I give the name of the bank or investment firm, address and the account number.

[FEDUKE404]

Extra work not needed?

I always attach a copy of the 5498 if available. And attach a note stating the amount was rolled over onto a qualified plan, in a timely manner. Also in that note I give the name of the bank or investment firm, address and the account number.

Isn't that what "rollover" properly shown on line 15 in accordance with the IRS instructions, already signifies ??

(Do you do the same thing with a QCD, instead of just adding those magic letters in a similar manner to line 15?)

And does this mean you are filing a paper return instead of efiling?

My "wise teachers" from days gone by took the approach you should never start attaching (well, we didn't efile then) anything to tax returns unless there was a clear need, darn near "requirement," to do so. I thing I've "attached" one explanation page to a federal tax return in the last half dozen years or so.

FE

[Twin Turbo Z]

Isn't that what "rollover" properly shown on line 15 in accordance with the IRS instructions, already signifies ??

(Do you do the same thing with a QCD, instead of just adding those magic letters in a similar manner to line 15?)

And does this mean you are filing a paper return instead of efiling?

My "wise teachers" from days gone by took the approach you should never start attaching (well, we didn't efile then) anything to tax returns unless there was a clear need, darn near "requirement," to do so. I thing I've "attached" one explanation page to a federal tax return in the last half dozen years or so.

FE

Attach a pdf of the form to your efiled return. Our software allows notes to be efiled on a line per line basis. I've had the IRS request the info before if we just say "Rollover". So I always do an explanation. But their are several ways to skin a cat.