Tang

[Snaggletooth]

TANG is not a Breakfast drink (I don't know whether they still make it).

It is "taxable amount not determined". Places the entire burden of taxation on the preparer. Would the customer know why? Of course not. We get "I dunno" from the client.

The only people that even have a clue are the issuers. But they don't know either, or else they wouldn't have marked the box.

Looking for suggestions from the group as to how you deal with this.

Thanks in advance

[Lion]

In what place on what form do you find TANG? Tell your client that if they can't find any other information for you, then the full amount is taxable.

And, I loved Tang as a kid.

[Rapid Robert]

He's probably referring to Box 2b of Form 1099-R. It's been like this since I started as a tax pro 20 years ago, most first-years at H&R Block get it by the end of their first season.

Short answer: if it's a regular IRA, it's all taxable, except possibly if Form 8606 shows basis in the IRA. The issuer has no way to know this.

Traditional, SEP, or SIMPLE IRA. Generally, you [the issuer] are not required to compute the taxable amount of a traditional, SEP, or SIMPLE IRA or designate whether any part of a distribution is a return of basis attributable to nondeductible contributions. Therefore, except as provided below or elsewhere in these instructions, report the total amount distributed from a traditional, SEP, or SIMPLE IRA in box 2a. This will be the same amount reported in box 1. Check the “Taxable amount not determined” box in box 2b.

Oh, and TANG does not match the phrase that is being referred to.

[Snaggletooth]

What I'm hearing seems to be that the issuer never knows whether the taxpayer has elected to have a basis in the IRA/SEP. So, as they can't be certain, they mark the box.

Unless there is knowledge of a basis in an IRA/SEP, I believe I should regard the entire amount as taxable. I do know some people have a basis, but it is not common.

Thank you.