tax1111 Posted April 15, 2021 Report Share Posted April 15, 2021 The taxpayer took distribution from roth IRA account. He is under 59.5 years old and the money has been in the roth ira accounts for over 5 years. The 1099R has empty box 2a and 2b is checked. box 7 code is J. My understanding is that the earnings portion needs to be taxed as ordinary income and is subject to 10% penalty. Am I right here? If I am right, how can I figure out the amount of earnings based on 1099R? The distribution is not a total distribution, so I guess I have to prorate the earnings based by total earnings of the roth IRA account when distribution was made times (distribution amount divided by total amount in the account when distribution was made) ? How can I get these information though? Thank you! Quote Link to comment Share on other sites More sharing options...
jklcpa Posted April 15, 2021 Report Share Posted April 15, 2021 Pub 590 has a complete chapter on Roth IRAs, and you will use form 8606. I'd suggest you review both the pub and the form's instructions. 2 Quote Link to comment Share on other sites More sharing options...
Pacun Posted April 15, 2021 Report Share Posted April 15, 2021 If it is a Roth IRA older than 5, nothing is taxable I think. Quote Link to comment Share on other sites More sharing options...
tax1111 Posted April 15, 2021 Author Report Share Posted April 15, 2021 1 hour ago, jklcpa said: Pub 590 has a complete chapter on Roth IRAs, and you will use form 8606. I'd suggest you review both the pub and the form's instructions. Thanks as always, Judy! Quote Link to comment Share on other sites More sharing options...
tax1111 Posted April 15, 2021 Author Report Share Posted April 15, 2021 1 hour ago, Pacun said: If it is a Roth IRA older than 5, nothing is taxable I think. Thank you so much! Quote Link to comment Share on other sites More sharing options...
Terry D EA Posted April 17, 2021 Report Share Posted April 17, 2021 On 4/15/2021 at 12:34 PM, Pacun said: If it is a Roth IRA older than 5, nothing is taxable I think. I think the early withdrawal penalty applies. Agree, no earnings or principal is taxable. OP said he was under 59 1/2 Quote Link to comment Share on other sites More sharing options...
Lion EA Posted April 17, 2021 Report Share Posted April 17, 2021 But, the penalty is 10% of the taxable distribution. There is no taxable distribution. Quote Link to comment Share on other sites More sharing options...
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