My client received a distribution of stock from the former custodian of her Roth IRA when her account with that custodian was closed, and continues to hold the stock.
My client paid $2.50 for 10,000 shares of the stock. The shares were never publicly traded. At the time the former custodian distributed the shares, my client says they were worth $.23 to $.24 per share, and has an from a broker (not the custodian) that values them at that price.
The custodian issued a 1099R for $25,000 for the distribution. Her Roth IRA basis is about $12,000, so some of the distribution will be taxable if the $25,000 is reported on the 2007 1040. Is a corrected
1099R warranted? If so, what to do if the client can't get the amended 1099R by October 15?