Taxpayer took a 2000 dollar distrubution from her IRA with 10% taken out for taxes. The remainder of the account (aobut 40K) a week later was rolled over to another IRA in a different Bank. It went from Bank to Bank. The TP got a 1099 R showing the entire amount (including the 2000) as a total distribution , code 7 on the 1099. Should this be on two seperate 1099's? or one showing a taxable portion and the rest as a rollover?? The Bank told her only one 1099 is issued for the entire amount. How do you show the 40K rolled over?
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Assuming that everything happened the way you said it did :Originally posted by mths View Post
I agree the bank is most likely at fault and should have issued two 1099r's. One for 2000 with code 7 and one for 40,000 with code G.
The Bank to Bank transfer is technically called a trustee to trustee transfer and they happen all the time. Is it possible that the client thinks he/she did this but actually did a 60 day rollover?
If the bank will not change the 1099R or remedy the situation I would file the tax return the correct way and gather all the documentation to support my claim. That would mean getting a statement from both banks(trustee's) that shows the money leaving and entering.
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