After IRA conversion, I have no 1099-R. What should I do?
Category: Business and Money > Accounting
Asked by: ywamer-ga
List Price: $5.00
10 Aug 2006 20:27 PDT
Expires: 09 Sep 2006 20:27 PDT
Question ID: 754880
Let me begin by mentioning that I have filed an extension with the IRS to delay filing until August 15, 2006. And this date is coming very soon! The Problem: During the end of tax year 2005, I ordered a Traditional to Roth IRA conversion. It appeared that this was executed normally. However, I only received a 1099-B form detailing the sales of the Traditional IRA mutual fund shares. Going online to my brokers website, I was able to download Form 5498, which shows all the funds were reported like an ordinary contribution. In other words, on the 1099-B, there is (for example) a sale of 200 shares worth $4400. Then, on the 5498, it shows a contribution of $4400 in box 10 - along with my regular annual contribution of $1000. Alas, it appears that I made annual contributions to the new Roth account of $5400 - too much for a single person and unallowed without a 6% tax, I believe. My question is: What do I do now? Can I file a 1099-R on my own and attach a letter of explanation? If I were to do that, what would I put in boxes 2 and 3 that ask for the taxable amount and capital gains? What about the code for box 7? Help! I want to get this stright and filed corectly, but when phone calls to my broker don't even help, what can I do?
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Re: After IRA conversion, I have no 1099-R. What should I do?
From: abezon-ga on 20 Aug 2006 20:54 PDT
First, you have until Oct. 15 to file, as the autimatic extension is 6 months. Second, you should never have received a 1099-B for sales from an IRA. IRAs produce ordinary income. Period. There are 2 possibilities azs to what happened. Either your broker sold assets in your regular taxable account & contributed the money to the Roth IRA, or your broker doesn't have a clue how to report IRA conversions. In either case, I'd recommend finding a new firm/broker. If your broker sold the taxable account & contributed the money to the Roth, you have to withdraw the excess contributions (plus earnings) & report the stock sales on Sch.D. You'll also want to write the IRS & request that they waive any penalties for overcontribution & explain that the broker messed up. If your broker converted the IRA to a Roth but screwed up the reporting forms, you can report the stock sales on Sch. D & show $0 gain, then report the net conversion amount on the IRA line of the 1040 (15 or 16). Write "Conversion" to the left of box 15/16b.
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