1099-q

[Jan S]

I have a 1099-Q with the following info:

Box 1 - Gross Dist. $1,800
Box 2 - Earnings $178
Box 3 - Basis $1,622
Box 4 - $0
Box 6 - X (the recipient is not the designated beneficiary)

There were no education expenses.

Do I include $178 or $1800 in income? I know there is a 10% penalty also. The TaxBook implies that only the earnings are taxable.

[solomon]

Basis is not taxable.

[Brian EA]

I have a 1099-Q with the following info:

Box 1 - Gross Dist. $1,800
Box 2 - Earnings $178
Box 3 - Basis $1,622
Box 4 - $0
Box 6 - X (the recipient is not the designated beneficiary)

There were no education expenses.

Do I include $178 or $1800 in income? I know there is a 10% penalty also. The TaxBook implies that only the earnings are taxable.

Report it on form 5329 with the 10% penalty on the $178.

brian

[solomon]

Report it on form 5329 with the 10% penalty on the $178.

brian

The earnings are reported on Line 21 of the 1040 which flow to the 5329 to calculate the penalty.