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IRS 5329 w/RMD Switch

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Byhsfmini

L1: IRS 5329 w/RMD SwitchIn 2008 I switched from Amorization to RMD. This will be my first year of filing with the lower distribution amount. I have one year left on my 72t. Do I need to provide a letter along with the form 5329 to explain why the amount is different? If so, what information should I provide in the letter to the IRS? My custodial uses code 7 on the 1099R.2010-01-02 11:09, By: hsfmini, IP: [71.245.60.159]
L2: IRS 5329 w/RMD SwitchIf custodian uses Code 7, you must be over age 59.5. In that case there is no need for you to file a 5329 because 7 is the correct code for someone over 59.5 UNLESS the custodian feels you have busted your plan, and then they use a Code 1. Weighing the pros and cons in sending a letter, I think you are better off to stay silent and simply report the penalty free distribution. However, be sure to keep your calculations in a safe place for at about 7 years, with an absolute minimum of 4 years after your 2009 filing deadline. If you get an inquiry, provide the IRS will the information at that time.In the event the custodian codes this with a Code 1, then you will need a 5329 and if you need to file a 5329 anyway, you could enter on the 5329 “one time switch to RMD method effective (show date)”.2010-01-03 04:31, By: Alan S., IP: [24.116.165.60]

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