1099R ?

[Eli]

Do we just check off the box on 2b stating taxable amount undetermined or are we required to try to find out if any of it is taxable?

Thanks!

Eli

[Lynn EA USTCP in Louisiana]

Do we just check off the box on 2b stating taxable amount undetermined or are we required to try to find out if any of it is taxable?

Thanks!

Eli

More 1099R's have come across my desk this year with the box checked for 'taxable amount not determined', and unless I am given information otherwise, the amount is fully taxable.

Lynn Jacobs, EA, NP

Kenner, LA

[Kimberly K]

Do we just check off the box on 2b stating taxable amount undetermined or are we required to try to find out if any of it is taxable?

Thanks!

Eli

Just depends on what kind of retirement plan it is.

[TAXBILLY]

Many times an IRA 1099-R wil have the box checked because they don't know whether the recipient was able to deduct it.

taxbilly

[Eli]

Gross Distribution: 16000

Taxable amount not determined: checked

Federal Income Tax Withheld: 0

Distribution code: 7

Ira/SEP/Simple box: checked.

Employee contributions box: 0

Not sure what else I need to list on here to see if you can help lead me in the right direction to find the taxable amount.

Thanks!

Eli

[Don in Upstate NY]

Gross Distribution: 16000

Taxable amount not determined: checked

Federal Income Tax Withheld: 0

Distribution code: 7

Ira/SEP/Simple box: checked.

Employee contributions box: 0

Not sure what else I need to list on here to see if you can help lead me in the right direction to find the taxable amount.

OK. This is a normal distribution from an IRA. It is ALL taxable, unless your client had made a non-deductible contribution to the IRA sometime in the past. In that case he should have filed a form 8606 when he made the contribution.

Not many people made non-deductible contributions to their IRAs, as there was no immediate tax benefit in doing so. Someone who did make such a contribution would have had to been financially astute to do it, and would likely remember it. Ask your client if he ever made a non-deductible contribution -- if he says 'no' or looks like he doesn't understand the question, then it's all taxable. If he says 'yes', ask him for his latest 8606. Then you fill out an 8606 for this year to calculate the taxable amount, and the amount of basis carryover.

[Eli]

Don,

Thank you so much. This really clears things up for me. I had told her that the amount would probably be all taxable. I just didnt want to cheat her out of anything. Thanks again for your assistance.

Eli

[Gail in Virginia]

OK. This is a normal distribution from an IRA. It is ALL taxable, unless your client had made a non-deductible contribution to the IRA sometime in the past. In that case he should have filed a form 8606 when he made the contribution.

Really, if non-deductible contributions are made to a traditional IRA, I believe that form 8606 should be filed every year if I am not mistaken.