Catherine Posted February 20, 2015 Report Share Posted February 20, 2015 One I know about - but have never done one before. Client took $50K out of an IRA but put it back a week later. She sold her house, bought a new one, closed on the new one first and needed some cash at the first closing that was coming from the second closing. So the IRA custodian reported the distribution on a 1099-R. They also show a "rollover" contribution on Form 5498. Is that the right way to report this? As though it was a rollover? Thanks. Quote Link to comment Share on other sites More sharing options...
ILLMAS Posted February 20, 2015 Report Share Posted February 20, 2015 Was it a loan or a withdraw? Quote Link to comment Share on other sites More sharing options...
Catherine Posted February 20, 2015 Author Report Share Posted February 20, 2015 Withdraw. Can't take a loan from an IRA; just a 401k-type plan. Quote Link to comment Share on other sites More sharing options...
MsTabbyKats Posted February 20, 2015 Report Share Posted February 20, 2015 Rollover...put it back into an account within 60 days 1 Quote Link to comment Share on other sites More sharing options...
Pacun Posted February 20, 2015 Report Share Posted February 20, 2015 I think you have to change the code 1 to G on the 1099-R and final de la conversacion. Quote Link to comment Share on other sites More sharing options...
Lion EA Posted February 20, 2015 Report Share Posted February 20, 2015 Don't change the code. I don't use Drake, but someplace around the Taxable box (or even the Code box) you should be able to access a drop-down menu or link to a worksheet or other input area where it asks you how much was rolled over. Now your 1099-R matches the 1099-R and your 5498 matches the 5498. 7 Quote Link to comment Share on other sites More sharing options...
Lynn EA USTCP in Louisiana Posted February 20, 2015 Report Share Posted February 20, 2015 in ATX right under box 2 is another box for the amount rolled over 1 Quote Link to comment Share on other sites More sharing options...
Pacun Posted February 20, 2015 Report Share Posted February 20, 2015 in ATX right under box 2 is another box for the amount rolled over I knew if was something simple as long as you know for sure that it was deposited within 60 days after it was taken out. Quote Link to comment Share on other sites More sharing options...
Catherine Posted February 21, 2015 Author Report Share Posted February 21, 2015 Thanks -- what I really was not certain of was the treatment. "Rollover" was the way to *make* it work -- but in my mind a rollover is a transfer to another account, rather than putting funds back into the same account. Drake has a section at the bottom of the input screen for rollover amount entries. Thanks to all! Quote Link to comment Share on other sites More sharing options...
Randall Posted February 21, 2015 Report Share Posted February 21, 2015 I make sure I have copies of their statements in my file showing the dates. Withdrawal out and deposit back in. 1 Quote Link to comment Share on other sites More sharing options...
Catherine Posted February 21, 2015 Author Report Share Posted February 21, 2015 Smart idea -- I will highlight those dates in the electronic copies I have. Quote Link to comment Share on other sites More sharing options...
Jack from Ohio Posted February 21, 2015 Report Share Posted February 21, 2015 (edited) Don't change the code on the 1099R, but report $0 taxable. Rollover is NOT the proper way. Wait for the CP2000 next year. Get copies of the check from the withdrawal and the receipt when it was re-deposited. When the CP2000 comes, send the documents. Any other things you try will only confuse the situation and will not work. This from multiple experiences. Edited February 21, 2015 by Jack from Ohio 1 Quote Link to comment Share on other sites More sharing options...
Catherine Posted February 21, 2015 Author Report Share Posted February 21, 2015 Thank you, Jack. Quote Link to comment Share on other sites More sharing options...
jklcpa Posted February 21, 2015 Report Share Posted February 21, 2015 (edited) Don't change the code on the 1099R, but report $0 taxable. Rollover is NOT the proper way. Wait for the CP2000 next year. Get copies of the check from the withdrawal and the receipt when it was re-deposited. When the CP2000 comes, send the documents. Any other things you try will only confuse the situation and will not work. This from multiple experiences. No, it's a valid rollover. Report it as such. Keep the documentation Randall suggested. Client must deposit the full amount withdrawn before taxes withheld, obviously. From Pub 590 - Rollover From One IRA Into Another You can withdraw, tax free, all or part of the assets from one traditional IRA if you reinvest them within 60 days in the same or another traditional IRA. Because this is a rollover, you cannot deduct the amount that you reinvest in an IRA. PLR 9010007 is the authority cited in TTB. Edited February 21, 2015 by jklcpa added the PLR reference 1 Quote Link to comment Share on other sites More sharing options...
Catherine Posted February 21, 2015 Author Report Share Posted February 21, 2015 No, it's a valid rollover. Report it as such. Keep the documentation Randall suggested. Client must deposit the full amount withdrawn before taxes withheld, obviously. From Pub 590 - Rollover From One IRA Into Another You can withdraw, tax free, all or part of the assets from one traditional IRA if you reinvest them within 60 days in the same or another traditional IRA. Because this is a rollover, you cannot deduct the amount that you reinvest in an IRA. It is indeed a valid rollover but keeping the papers ready to mail in if/when the IRS sends a letter of non-comprehension of their *own* $#@ rules is a wise pre-emptive strike. I know the details now and have them to hand; 15 months from now I'll be scratching my head over where I filed the information and what exactly happened. 2 Quote Link to comment Share on other sites More sharing options...
Jack from Ohio Posted February 22, 2015 Report Share Posted February 22, 2015 (edited) No, it's a valid rollover. Report it as such. Keep the documentation Randall suggested. Client must deposit the full amount withdrawn before taxes withheld, obviously. From Pub 590 - Rollover From One IRA Into Another You can withdraw, tax free, all or part of the assets from one traditional IRA if you reinvest them within 60 days in the same or another traditional IRA. Because this is a rollover, you cannot deduct the amount that you reinvest in an IRA. PLR 9010007 is the authority cited in TTB. That is very nice, but the IRS computers that spit out CP2000 notices have no clue.... When it doesn't match, it doesn't match. Hence the creation of the CP2000. I have templates of the letter to answer this with. In the last 5 years, at the firm, probably 25-30. Edited February 22, 2015 by Jack from Ohio Quote Link to comment Share on other sites More sharing options...
jklcpa Posted February 22, 2015 Report Share Posted February 22, 2015 That is very nice, but the IRS computers that spit out CP2000 notices have no clue.... When it doesn't match, it doesn't match. Hence the creation of the CP2000. I have templates of the letter to answer this with. In the last 5 years, at the firm, probably 25-30. Can you show me where I said it wouldn't generate a CP2000? I didn't. The statement I made was because Catherine's original post and her post #9 indicated that she was in doubt about the transaction being a valid rollover since it went back into the same account and because your post #12 said that rollover was not the proper treatment. I also said that she should keep the documentation that Randall suggested. I agree with that because she'll need that if the client receives a CP2000, and I included the PLR reference if the IRS tries to say the rollover isn't valid because it went back into the same account. I can't believe I had to explain all that. Sheesh. Quote Link to comment Share on other sites More sharing options...
Cathy Posted February 22, 2015 Report Share Posted February 22, 2015 Can you attach a pdf copy of the docs to the return when it's e-filed?? If you would get a CP2000 letter still, just refer them to the docs originally attached with the return?? Quote Link to comment Share on other sites More sharing options...
Pacun Posted February 22, 2015 Report Share Posted February 22, 2015 Sometimes, a human being see the letters before they are sent out. So being proactive will help in most cases. Or better yet, you are on vacation when the client gets the letter then it takes the copies of the taxes to another preparer and he sees that you ignored what the client told you about the rollover? I think you will be better off preparing an accurate return regardless of the possible CP2000 it will generate. Quote Link to comment Share on other sites More sharing options...
joanmcq Posted February 23, 2015 Report Share Posted February 23, 2015 If you key the program correctly, it'll print 'ROLLOVER' to the left of line 15. I assume the efile has an indicator somewhere that it's a rollover as well. But how the IRS computers are programmed to spit out the CP2000s, I don't know. I just make the client aware that if a notice does come it, to let me know ASAP. Quote Link to comment Share on other sites More sharing options...
FreedomTaxed Posted February 23, 2015 Report Share Posted February 23, 2015 https://www.law.cornell.edu/uscode/text/26/408 Check out 26-408(3) "Rollover contribution". 1 Quote Link to comment Share on other sites More sharing options...
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