I’m not sure I understand the withdrawal for the excess contribution to a Roth IRA.
Client over funded her Roth IRA in 2006, she advised the financial institution to withdraw her excess amount plus earnings and have that applied for her 2007 Roth contribution. She has a previous balance in her Roth of over $18,000.
Code Sec. 4970(f) any contribution distribute from a Roth IRA before the due date of the individual’s tax return is treated as an amount not contributed.
First question-should she get a 1099 from the financial institution for the amount withdraw plus earnings,
Should the earnings be tax plus 10% penalty, or do the earnings fall under Code. Sec. 408A(d)(4) distributions that aren’t qualified distributions are treated as made first from contributions to all of an individual’s Roth IRAs and are nontaxable to that extent; distributions in excess of contributions are taxable.
I guess the real question is, are the earnings taxable and subject to the 10% penalty.
Client over funded her Roth IRA in 2006, she advised the financial institution to withdraw her excess amount plus earnings and have that applied for her 2007 Roth contribution. She has a previous balance in her Roth of over $18,000.
Code Sec. 4970(f) any contribution distribute from a Roth IRA before the due date of the individual’s tax return is treated as an amount not contributed.
First question-should she get a 1099 from the financial institution for the amount withdraw plus earnings,
Should the earnings be tax plus 10% penalty, or do the earnings fall under Code. Sec. 408A(d)(4) distributions that aren’t qualified distributions are treated as made first from contributions to all of an individual’s Roth IRAs and are nontaxable to that extent; distributions in excess of contributions are taxable.
I guess the real question is, are the earnings taxable and subject to the 10% penalty.
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