1099-R for Annuity

[David]

TP's husband died during 2008 and he prepared their prior year tax returns. She knows nothing about the details of their tax situation.

He received a 1099-R for annuity paid. I can't find any detailed worksheets in the prior year tax return that shows how the taxable amount was determined. Without a detail of all of the retirement income received in 2007, I can't really see how this particular annuity was handled. It appears that he did not show any of it as taxable.

Is there a way for me to determine what part of this is taxable without prior year worksheet calculations?

Box 1 shows distribution of $52,888. Box 2- unknown. Box 5- Employee contributions/Roth contributions or Ins. Premiums $3,436. box 9b- total employee contributions $55,613.

It seems as though I should be completing the simplified method section of the 1099-R in the ATX program. I attempted to input best estimates of starting date, etc. However, nothing is transferred to box 2a- taxable amount.

My questions are:

Is the reason nothing is being transferred to box 2a because box 9b shows $55,613 of total ee contributions? This doesn't seem correct. Shouldn't a portion of this amount be used to offset the $52,888 amount in box 1?

Also, is the amount in box 9b the original amount the ee contributed or is it reduced by some amortization amount?

If I have to use the simplified method to determine what part is taxable, how do I give credit for the $3,436 shown in box 5?

Is it necessary to input something in box 6 of the simplified method section for amounts previously recovered after 1986? I would think so. My problem will be that I'm sure the TP does not have this information.

Thanks for your help.

[RitaB]

Is there a way for me to determine what part of this is taxable without prior year worksheet calculations?

David - I had this same situation, and the widow couldn't find ANY old tax returns. I asked her when her deceased husband retired, even though I figured there was no way she'd know or be able to find out. Without missing a beat, she fired off the date: Sept 02, 1994. I was stunned. It was their daughter's 20th birthday, and they just always remembered that.

I used Instructions to 1040, pages 24-25, and found everything I needed to know. It was a good day.

Maybe you can try that. I hope she remembers!

[David]

David - I had this same situation, and the widow couldn't find ANY old tax returns. I asked her when her deceased husband retired, even though I figured there was no way she'd know or be able to find out. Without missing a beat, she fired off the date: Sept 02, 1994. I was stunned. It was their daughter's 20th birthday, and they just always remembered that.

I used Instructions to 1040, pages 24-25, and found everything I needed to know. It was a good day.

Maybe you can try that. I hope she remembers!

Thanks so much for your help. She remembered it was March or April of 1987. So this helped me tremendously.

She received the survivor's payments in late 2008. When following the worksheet on page 25 it says to use Table 2 for the amount to enter on line 3. Their combined ages at the beginning of the annuity was 104. The table says to input 410 on line 3. However, the ATX program entered 120, which would mean all contributions have been recovered and the complete distribution is taxed.

I overrode the number ATX produced and entered 410.

Have you had that problem? I am leary of overriding numbers but I can see clearly that Table 2 says to use 410.

Any thoughts?

Thanks for your help.

[RitaB]

Thanks so much for your help. She remembered it was March or April of 1987. So this helped me tremendously.

She received the survivor's payments in late 2008. When following the worksheet on page 25 it says to use Table 2 for the amount to enter on line 3. Their combined ages at the beginning of the annuity was 104. The table says to input 410 on line 3. However, the ATX program entered 120, which would mean all contributions have been recovered and the complete distribution is taxed.

I overrode the number ATX produced and entered 410.

Have you had that problem? I am leary of overriding numbers but I can see clearly that Table 2 says to use 410.

Any thoughts?

Thanks for your help.

David - I believe you need to use Table 1 for the worksheet line 3, since he retired before 1997. Just use his age, not comined ages for Table 1. (Don't check the box on ATX for combined ages.) Mine came out in agreement with program worksheet. (Guess I didn't even need to go through that worksheet, but I wanted to really think it through since I had nothing to go by from the prior returns.)

My guy was age 57, and the number on line 3 was 260.