neilbrink Posted April 4, 2014 Report Share Posted April 4, 2014 My 75 yr old client had a Roth IRA distribution in 2013 that shows Code T on the form, but ATX is pulling it over to include in income. What am I missing? Quote Link to comment Share on other sites More sharing options...
Jack from Ohio Posted April 4, 2014 Report Share Posted April 4, 2014 What are you putting in the taxable amount box? Should be $0 unless he is taking out more than his basis. Quote Link to comment Share on other sites More sharing options...
David1980 Posted April 4, 2014 Report Share Posted April 4, 2014 8606 line 22. 1 Quote Link to comment Share on other sites More sharing options...
joanmcq Posted April 5, 2014 Report Share Posted April 5, 2014 Was the custodian Pershing? One of the forums I'm on on Linked in has this same question; the code should be Q, not T. If the client is 75, I'll assume the account was open at least 5 years? The poster on linked said Pershing told her 'they always use code T'. Which is horsehockey for the broker if the account has been with that broker for at least 5 years. 1 Quote Link to comment Share on other sites More sharing options...
jklcpa Posted April 5, 2014 Report Share Posted April 5, 2014 I had one picked up today that had a Roth open for more than 5 years, 1099R came through with "T" also. Cambridge Investments. My husband had one last year from Vanguard that was reported correctly with code "Q". Account had been open about 15 years. 1 Quote Link to comment Share on other sites More sharing options...
Abby Normal Posted April 5, 2014 Report Share Posted April 5, 2014 And the 5 year rule is only for Roth conversions, but older people have been being advised to do these conversions to save their heirs taxes. Quote Link to comment Share on other sites More sharing options...
JohnH Posted April 5, 2014 Report Share Posted April 5, 2014 Roth conversions also provide a way to avoid RMD's after age 70-1/2 on the amount converted. In some cases that can provide some marginal benefit, assuming the person has a reasonable expectation of living a long time. If the person has retirement income high enough to assume they will always be in the 15% marginal bracket or above, and if their current income doesn't max out the 15% bracket, then a Roth conversion sufficient to use up the 15%bracket is virtually a no-brainer. It guards against future increases in the tax rate AND eliminates the RMD issue for the converted amounts. 1 Quote Link to comment Share on other sites More sharing options...
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