1099-R coding

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L1: 1099-R codingWill the trustee/custodian blindly code a “02” on the 1099-R if the IRA distribution form is marked to code it that way? The Trustee/CustodianI”m looking at, doesn”t request method, interest rate, age, etc….., soit appears they blindly code it. Are all Trustees/Custodians the same?2002-11-21 12:15, By: roger, IP: [127.0.0.1]
L2: 1099-R codingYou might want to make sure that they intend to code it the way you want it.
Are all the same – apparently not – I review everyone my company gets and how the 1099R is coded is determined on a case-by-case basis. 2002-11-21 12:21, By: Gfw, IP: [127.0.0.1]

L2: 1099-R codingHello Roger:
There seems to be two different attitudes amongst trustees; those that will put a “2” in box 7 of the 1099R simply becuase you tell them to and don”t ask any further questions. On the other hand, there are some trustees that want to see documentation or otherwise want to exert control over your plan and distributions before they put that “2” in box 7. However, it really doesn”t matter. The responsibilty for the “qualification” of the plan and the execution of the distributions is 100% your responsibility, no matter who the trustee is and irrespective of what code they put on the 1099.
TheBadger
wjstecker@wispertel.net

2002-11-21 12:24, By: TheBadger, IP: [127.0.0.1]

L2: 1099-R coding
Badger, you are definitely right – it”s always between the owner and the IRS. But, with a code of 2, there is little chance of a 2nd look.
Looking at it from the other side, it”s not necessarily that the Trustee/Custodian wants to exert control as much as it is being able to justify the coding (with documentation) for the way the 1099R was completed if an audit occurs – remember, the Trustee/Custodian assumes a certain liability to insure that the IRS forms are properly completed. 2002-11-21 13:29, By: Gfw, IP: [127.0.0.1]

L2: 1099-R codingThere is a disparity in how custodians/trustees report 72t distributions. Some take the approach of reporting all 72t distributions as premature withdrawals and leave it up to the taxpayer to justify the exception. Others will tax report it as “exception applies” if they have reason to believe that the IRS rules have been followed — for example they may request a copy of an illustration which states the interest rate, mortality table and method used. Still others might report it as “exception applies” without any evidence. Companies in the last category are probably taking some unnecessary risksin terms of their relationship with IRS.But, as pointed out earlier, it is ultimately up to the taxpayer to demonstrate compliance.2002-11-21 13:52, By: WLE, IP: [127.0.0.1]