Yardley CPA Posted March 12, 2021 Report Share Posted March 12, 2021 MFJ spouse withdrew funds from her Roth IRA in the amount of $2,000. She is 48 years old. 1099-R was coded as J: Early distribution from Roth IRA no known exception. There are no exceptions based on the client. They just needed the funds. Her basis in the account is $11.369. I completed Part III of the 8606 as follows: Is this a taxable event for her? The ATX program shows the $2,000 distribution on line 4a but treats it as a non-taxable event with line 4b showing zero. I appreciate your feedback. Quote Link to comment Share on other sites More sharing options...
Lynn EA USTCP in Louisiana Posted March 12, 2021 Report Share Posted March 12, 2021 Basis, contributions, are deemed to be distributed first. If the distribution exceeds the basis then the overage is taxable. Was the account open at least 5 years ?m Quote Link to comment Share on other sites More sharing options...
Yardley CPA Posted March 12, 2021 Author Report Share Posted March 12, 2021 5 minutes ago, Lynn EA USTCP in Louisiana said: Basis, contributions, are deemed to be distributed first. If the distribution exceeds the basis then the overage is taxable. Was the account open at least 5 years ?m Yes...account was opened in 2003. I wanted to confirm my understanding was correct, that since basis was more than the distribution it was non-taxable even though she is below 59 1/2. Thank you, Lynn. 2 Quote Link to comment Share on other sites More sharing options...
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