Year End IRA Withdrawel With Next Year Rollover

Scenario: Funds are withdrawn from an IRA in December 2006 and rolled over in January 2007.

Must the withdrawal be reported as 2006 income to comply with the 1099-R that will be issued? (I think I know the answer, but ask just in case.) If yes, how is the rollover handled in 2007?

Bill

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Reply to
William Brenner
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You report rollovers on the return for the year of the distribution, in this case 2006. There will be nothing on the 2007 return regarding the rollover.

-- Phil Marti Clarksburg, MD

Reply to
Phil Marti

If you rollover the gross amount within the 60 day window, you just report the gross amount on Line 15a and taxable amount of zero on 15b ( 2006 form 1040) and write the word Rollover on the line. There is no 2007 transaction that gets reported as you don't receive a 1099-R from the receiving institution.

Reply to
A.G. Kalman

The withdrawal will be reported as a "distribution" on line

15a of your 1040 form, with -0- recorded on line 15b. Write ROLLOVER next to line 15b. See Pub 590, page 23 for additional information.

There is nothing to report in 2007, unless you fail to complete the tax-free rollover.

Reply to
Herb Smith

My experience was rollover from 401K institution to a Rollover IRA at a different institution. That generated a

1099R from the 401K institution which has the distribution has a code for rollover. The 1099R issued by the second institution the conversion to ROTH had taxes withheld. The 1099R tax year was respective of when the action executed.

Carl

Reply to
GORILLA

I'm certainly not a tax pro, but I would expect that as long as you rolled the funds over within the 60-day period, you would not include the funds in income. Instead, it would all be excluded. The line for reporting the IRA distribution has fields for taxable and non-taxable amounts. The rollover would make it non-taxable, and that would reconcile with the 1099-R form. Crossing the year-end boundary is immaterial.

Reply to
Tom Russ

The 1099-R doesn't indicate that the distribution was a rollover, except when it's a direct transfer. You report the full distribution and that $0 of the distribution is taxable on your 2006 return. Nothing is reported on your 2007 return. The IRS will get "confirmation" of the rollover from the 5498 filed by the IRA custodians. Ira Smilovitz

Reply to
Ira Smilovitz

In which case there is still nothing to report on the 2007 return. You have to amend 2006 if the rollover of a 2006 distribution isn't completed.

-- Phil Marti Clarksburg, MD

Reply to
Phil Marti

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