No 1099R for Shares Sold in Traditional IRA Account

That doesn't matter. The IRA is a trust fund that has assets.

What counts is the amount of cash you take _out_ of the IRA. It doesn't matter whether you sell stock in it or not.

The sale is completely irrelevant to income taxes.

Seth

It sounds like you don't understand how an IRA account operates and what a minimum required distribution is.

No. See below for a basic understanding on how retirement accounts operate.

Based on the facts presented, I am assuming that after you initiated the October 2010 sale and the March 2011 sale, you left the proceeds of the sales in the account. Transactions that take place inside of an IRA or any other qualified retirement plan are not reportable. You don't report your interest or dividend income, nor do you report your gains or losses on the sale of any assets. You do not receive any tax information forms from the trustee/custodian reporting those transactions. The only time you have a reportable transaction is when you take a distribution. The trustee will send you and the IRS a 1099-R reporting the actual distribution.

You say that you turned age 70 1/2 in 2010. As such, you were required to take a minimum required distribution (MRD) for tax year 2010. As this was your first MRD, tax law allowed you to defer taking the 2010 distribution until April 1, 2011. An MRD requires that you actually withdraw that amount. You have apparently failed to take your 2010 MRD. You have what is known as an excess accumulation in your IRA. There is a penalty for not taking an RMD. The penalty is an excise tax equal to

50% (that is not a typo) of the amount not withdrawn. You are obligated to file IRS Form 5329 for tax year 2010 to identify the penalty you owe. If you already filed your 2010 return, the 5329 can be signed and mailed separately. If you have not filed your 2010 return, you can include the 5329 with the return. The 50% penalty is calculated on page 2 of the form in Part VIII.

The IRS does allow for a waiver of the penalty for reasonable cause. I have observed the following reasons as being acceptable to the IRS as reasonable cause: Illness, hospitalization, disaster (casualty), mathematical error when an amount withdrawn was less than required and an error by the custodian. Forgetting to take an RMD is not an acceptable reason.

In order to obtain a waiver, you need to do the following:

1. Immediately withdraw your 2010 MRD. The custodian can calculate it for you.
2. Complete the 2010 Form 5329 as follows: Enter your name and SSN number on the front. Only enter an address if you are filing the 5329 by itself. Only sign the 5329 if you are filing it separately. On line 50 enter the amount of the 2010 MRD you should have taken. On Line 51 you would enter a zero assuming you failed to take the MRD. On the dotted line directly next to the Box for Line 52 enter the letters RC and in parentheses the amount of the waiver (the RMD you failed to take). Place a zero in the box for Line 52 and Line 53.
3. Attach a letter of explanation to the form. You should inform the IRS that you have corrected the error as soon as you discovered it by taking your 2010 RMD. You should then explain why you failed to take your 2010 distribution by the deadline.
4. Do not pay any penalty. If the IRS does not agree to waive the penalty, they will bill you the 50% tax.

Lastly, you are still required to take your 2011 MRD no later than

12/31/11. No later than 2/15/12, E-Trade will send you a 1099-R for 2011 that will reflect the total amount of 2011 actual distributions. You would report this amount on your 2011 tax return.

Did you take any withdrawal from this account? The RMD?