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    1099-r

    Taxpayer withdrew $13,500 from pension plan and 1099-R has distribution code of "1" in box 7. IRA/Sep/Simple marked. Taxpayer had $11,650 in medical expenses in 2006. Would I just fill out form 5329 with exception code 05, (IRC section 72(t)(2)(B)) to have $11,650 of the $13,500 qualify for the exception to 10% penalty?

    #2
    If I'm not mistaken, the portion of medical expenses that can be used to decrease the penalty is the amount over 7.5%.

    They don't have to itemize, but you do have to figure that part out.
    You have the right to remain silent. Anything you say will be misquoted, then used against you.

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      #3
      I agree with WhiteOleander.

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