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What can I do if 1099-R was issued incorrectly for a tax free rollover? Also 10% of taxes were withheld. Mutual fund co. refuses to send to client a corrected 1099R

ars
Level 1
 
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abctax55
Level 15

Is there a F 5498 showing the transfer?

edit...except those don't really show up until May.

How about the actual transfer forms? 

Your client may be correct, but maybe not. Clients are often wrong; brokerages not so often.

"*******Tax software is no substitute for a professional tax preparer*******
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12 Comments 12
abctax55
Level 15

Is there a F 5498 showing the transfer?

edit...except those don't really show up until May.

How about the actual transfer forms? 

Your client may be correct, but maybe not. Clients are often wrong; brokerages not so often.

"*******Tax software is no substitute for a professional tax preparer*******
( Generic Comment )"
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abctax55
Level 15

How was the entire distribution rolled over if there was withholding?

"*******Tax software is no substitute for a professional tax preparer*******
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ars
Level 1
the distribution was rolled over without the 10% withheld taxes
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dd4vols
Level 10
Level 10
so the taxpayer timely rolled over the remaining 90% of the distribution after he received the funds?
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ars
Level 1
taxpayer did not roll it over.  It was an IRA transfer to another mutual fund.  Client did not have any checks written to her.
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ars
Level 1
It was an IRA to Simple IRA transfer by the mutual fund company
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dd4vols
Level 10
Level 10
what is in Box 7?   I had a client just this year, tell me the same story, but i happened to know her NEW broker, and upon further review, she brought in a check to him.   Not saying that's the situation in your case. So I just put the taxable amount the same as the withholding amount, and then  went to the Misc Statement form and explained what transpired in reality... that the taxpayer had timely rolled over ALL the funds of the IRA except the income tax withheld.  and that is what happened, taxpayer got credit for the amount of W/H... which more than covered the income tax on that amount.
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abctax55
Level 15
:+1::+1:
"*******Tax software is no substitute for a professional tax preparer*******
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taxiowa
Level 8
Level 8
As long as you have proof that this was rolled over, go down to line B2 of 1099R worksheet 3/4 way down and enter the amount rolled over.  This would be the total less the tax withheld.  Because that is the only amount eligible for rollover.  And keep proof in your file in case questioned.  So taxpayer will end up with taxes paid in for no income reported except the amount of withheld taxes themselves.
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ars
Level 1
Would the amount of the taxes withheld included as income? As the withheld taxes were not rolled over
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taxiowa
Level 8
Level 8
Yes they are income if you do as I pointed out that only the remainder is rolled over.  oh I see I said no income.  I will correct that last line above.
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ars
Level 1
thanks so much.  I looked at the form and method and feel comfortable with the solution
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