1099 R & Form 5329

L1: 1099 R & Form 5329I recently computed, submitted, and received my 5th annual 72t distribution. As I required Bill”s assistance with a private letter ruling for my first two distributions, I have attempted to be diligent with my documentation henceforth. Thus my surprise whenFidelitystated the IRSrequire box 1 (early distribution) of my ”07 1099-R marked versus box 2which has historically designateda 72t distribution. Fidelity further stated to file as normal form 5329 to designate by distribution as a 72t. Problem is, I”ve never heard of a form 5329 thus I”m seeking assistance.
Thanks!!2007-11-09 10:11, By: Bob Y., IP: [67.49.98.200]

L2: 1099 R & Form 5329More than likely, the early distribution coding on the 1099R just reflects a Fidelity policy of no longer providing the 2 coding. This has become the norm for IRA custodians. The taxpayer is then required to use Form 5329 to claim the exception from the penalty by entering Code “02” on Form 5329, Part I, line 2. Therefore, your return would look pretty much like the typical taxpayer who is taking 72t distributions.
I assume that you are using a recalculation method, since you indicated that a computation was necessary. I would recheck that soon, since you can make any corrections needed by rolling back (if eligible for rollover) amounts in excess of the correct amount within 60 days of the distribution, or taking any additional amounts out needed to match the correct calculation prior to the holiday rush.2007-11-09 10:28, By: Alan S., IP: [24.116.165.60]