Terry D EA Posted February 7, 2012 Report Share Posted February 7, 2012 I have a client who is disabled and has reached the age of 59 1/2. Client DOB: 3/29/1952. Client claims she took distribution from a retirement plan after she reached 59 1/2 years old. She gave me two 1099R forms. One form has code 7 normal distribution and the other has code 1. This is Fidelity and I have seen them screw these things up in the past. Because of the coding, there is a 3k+ balance due to the Feds. Can any of the exceptions apply here? My first response is to as the client if she can show or prove the date she took the distribution and that date should be after 9/29/2011. If she can, how do we proceed? My thoughts are to ask Fidelity to reissue the 1099R with the correct coding. I looked at the 5329 form to see if any of the exceptions may apply but am too tired to think. Any help is appreciated Quote Link to comment Share on other sites More sharing options...
Lion EA Posted February 7, 2012 Report Share Posted February 7, 2012 Page 3 has the exceptions and code numbers to use: http://www.irs.gov/pub/irs-pdf/i5329.pdf Quote Link to comment Share on other sites More sharing options...
NECPA in NEBRASKA Posted February 7, 2012 Report Share Posted February 7, 2012 Terry, Is she totally and permanently disabled? You wouldn't need to worry about the date then. Quote Link to comment Share on other sites More sharing options...
Terry D EA Posted February 7, 2012 Author Report Share Posted February 7, 2012 She does receive SS disability benefits which is her only source of income. With that said, I think you are correct. I will ask her about the disability to be sure. Quote Link to comment Share on other sites More sharing options...
joanmcq Posted February 7, 2012 Report Share Posted February 7, 2012 yes, because if she took it out a day before 59.5, it's a code 1. Quote Link to comment Share on other sites More sharing options...
SCL Posted February 18, 2012 Report Share Posted February 18, 2012 i have had ONE (recent) experience with this type of situation...apart from the disability aspect (?) that may save this taxpayer. from prior discussion on this board and after the fact , i now understand this: the taxpayer initiated an ira withdrawal one or a few days before turning 59 1/2. the check (distribution) was received after 59 1/2. "CONSTRUCTIVE RECEIPT" establishes the distribution date before 59 1/2 (like a stock sale trade date). the local prudential insurance company broker/agent who filed the paperwork did not know about "constructive receipt"...the national prudential tax/ accounting department did know about "constructive receipt" and issued a code 1 distribution. Quote Link to comment Share on other sites More sharing options...
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