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1099

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ByMobey

L1: 1099Is it still accurate that if a 72T distribution is in progress, the 1099 should be coded “2”?
What are the new codes and what do they mean?2005-01-21 14:56, By: Mobey, IP: [67.106.28.17]

L2: 1099Code ”2” may still be used for a SEPP. The operative word is may. If the Trustee/Custodian knows the plan is a valid SEPP that meets (and continues to meet) the requirements, they will most likely use a code of ”2”. If they do not know if the plan meets all requirements, or because they choose to, they can also use a code of ”1” – it”s really their choice. After the confusion created earlier this year by the IRS, I have no doubt that many will simply use a code of ”1” and let the owner file form 5329.Hope this helps.2005-01-21 15:05, By: Gfw, IP: [172.16.1.70]

L2: 1099Thanks,
So then I assume that if the SEPP (72T) is in good order and we do not receive a “2” code on the 1099, we should file the 5329 and use code “2” on it.
Correct?2005-01-21 16:10, By: Mobey, IP: [67.106.28.17]

L2: 1099Yes you should; if you don’t the great IRS computer in the sky will automatically issue a deficiency notice.
TheBadger
wjstecker@wispertel.net
2005-01-21 19:49, By: TheBadger, IP: [66.250.23.21]

L2: 1099A couple of actual examples of what Gfw’s talking about:
If you initiate an SEPP at Vanguard, their forms have you do the calculations and tell them theamount to be withdrawn each period, and they code their 1099R’s as 01.
If you initiate an SEPP at Fidelity, their forms just ask for the acct to use, which type you prefer (amortization, RMD, etc.) and they do the calculation and determine the withdrawal amounts, and they code their 1099R’s as 02.
Rick2005-01-21 22:27, By: Rick S., IP: [64.160.147.180]

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