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Tax Reporting of SEPP Withdrawal

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ByWayne

L1: Tax Reporting of SEPP WithdrawalI took my first SEPP withdrawal in 2004; so I am now filling out tax returns which, for the first time, involve a SEPP withdrawal. This withdrawal is 100% taxable. My IRA custodian put code 2 in box 7 of form 1099-R.
My understanding from reading the tax instructions is as follows:
1. The SEPP withdrawal should be reported on line 15b of form 1040.
2. Line 15a of form 1040 should be left blank.
3.I should not file form 5329.
Is my interpretation of the tax instructions correct?
Thanks in advance for your help.
Wayne2005-02-14 12:47, By: Wayne, IP: [152.163.100.202]

L2: Tax Reporting of SEPP WithdrawalHello Wayne:
I haven’t looked at this year’s instructions; however, unless they have changed the same amount should appear on both lines 15a and 15b.
TheBadger
wjstecker@wispertel.net
2005-02-14 15:42, By: TheBadger, IP: [66.250.23.21]

L2: Tax Reporting of SEPP WithdrawalI do not believe that the form 1040 instructions for lines 15a and 15b have changed insofar as SEPPs are concerned.
There are two SEPP-related passages:
1.Except as provided below, leave line 15a blank and enter the total distribution on line 15b.۝
The exceptions provided are not SEPP-related.
2.Note. If you (or your spouse if filing jointly) received more than one distribution, figure the taxable amount of each distribution and enter the total of the taxable amounts on line15b. Enter the total amount of those distributions on line 15a.۝
This does not apply to me because I got one withdrawal from one IRA account.
The combined effect of these two passages is why I believe that line 15a should be left blank. I realize that I may be wrong. If I am wrong, I hope someone will explain why.
Thanks,Wayne2005-02-14 20:10, By: Wayne, IP: [152.163.100.202]

L2: Tax Reporting of SEPP WithdrawalHi Wayne,
Hope you are right about line 15a because I used H&R Block’s Tax Cut software and it left line 15a blank (as you described).
Regards,
gus2005-02-16 21:44, By: gus, IP: [206.149.200.207]

L2: Tax Reporting of SEPP WithdrawalI just ran some two tests using Turbo Tax and got results similar to Gus. I assumed a $100k distribution from and IRA and rolling over all $100k, and then rolling $90k. When I did the complete rollover, line 15b had $100k and 15a was blank. For the $90k rollover, line 15a had $100k and 15b had $10k. Of course if you are rolling from a qualified plan, 401(k), lump sum pendison, etc, the figures will show up on lines 16a and 16b.
I guess when line 15a is being left blank, that qualifies as “tax preparation simplification” for some reason. Go figure.
Jim2005-02-17 08:23, By: Jim, IP: [70.184.1.35]

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