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IRA Transfer

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ByStingray

L1: IRA TransferIn 2009 I transfered a IRA from Interactive Brokers to Vanguard. I did all this online with IB. The assests were electronicly transfered. I remember being asked a few questions online like is the amount taxable and are you under 591/2. I have now received a 1099R with box 2b checked and box 7 showing code 1, simple IRA checked. What I wanted to do was a trustee to trustee transfer so no taxes would be due. The research I have done, tells me that I should not receive a 1099r on this type of transfer. How do I start to correct this problem?Thanks,Lou2010-02-02 03:02, By: Stingray, IP: [67.35.85.86]
L2: IRA TransferYou can find a link to the 1099 Instructions here http://72t.net/ResourcesAndLinksThis really ins’t a SEPP question, please contact the company that sent you the 1099 for assistance.2010-02-02 09:50, By: Gfw, IP: [216.80.125.206]

L2: IRA TransferJust to follow up, I got IB to agree to issue a corrected 1099R and show the distributive amount at 0. Was surprised they did not give me a hard time.2010-02-07 14:23, By: Stingray, IP: [67.35.85.86]

L3: IRA TransferThe issue here is not that you would be taxed, since you rolled over the funds. The issue is that they should not have issued a 1099R if the move was made by direct transfer. Re issue with a -0- does not help as you will still have to report a rollover on line 15 of Form 1040. This will cause the IRS to count this as a rollover when it should have been a direct transfer. Therefore, you should have asked them to rescind the 1099R completely and then you would not have to report the rollover.2010-02-07 20:49, By: Alan S., IP: [24.116.165.60]

L4: IRA TransferAlan, thanks for the reply. I have received a new 1009R from IB. This is a new 1099R, not corrected. From what I understand, 1099R are not sent to the IRS until March 31. Line 2b is checked and line 7 shows code 1 with IRA checked. I have followed your advice and now have requested that IB rescind the 1099R. I have a feeling this might not fly with them. Reporting it as a direct rollover when it really is not seems to be asking for trouble from the IRS. I have found that the terms direct transfer and roll over get interchanged, when they are actualy two different things. I know this is a SEPP forum, but I think people can learn from my situation. I will follow up if things change.Thanks for the advice.Lou2010-02-09 14:33, By: Stingray, IP: [67.35.85.86]

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