Does direct transfer to new IRA disqualify?
L1: Does direct transfer to new IRA disqualify?I started an IRA at company B with funds I transferred directly from Company A. I had a 72t with company A and Iam continuing thesame plan at company B. Problem is, Company A sent a 1099R with a 1 distribution code instead of a 2 and when I called them they said they are required to report that way when the 72t has been disqualified. My broker told me that direct transfers will not disqualify the 72t if I continued the program at comp B. Whats up?2009-03-25 19:55, By: Scotty, IP: [188.8.131.52]
L2: Does direct transfer to new IRA disqualify?Just file a form 5329 with IRS, and relax. Your broker is correct, and the 1099-R is coded correctly. Most firms code everything “1” now.2009-03-25 20:53, By: dlzallestaxes, IP: [184.108.40.206]
L3: Does direct transfer to new IRA disqualify?I agree. What company A should have said was that the SEPP is not necessarily disqualified, but since they cannot vouch for the fact that the correct amount was distributed in combination from both IRA custodians, they must code the distribution as early.
As dlz indicted, just file the 5329 to claim the exception if the annual total over both accounts was correct.2009-03-26 00:03, By: Alan S., IP: [220.127.116.11]