Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (8) | Ignore Thread Prev Thread | Next Thread
Author: JeanDavid Big funky green star, 20000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121438  
Subject: 2007 FORM 5498 Date: 5/31/2008 5:58 AM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
Yesterday, 2008 May 30, I got a 2007 FORM 5498 from my broker, TD Ameritrade, that says I better declare the value of the 100 shares of VZ I converted from my IRA to my Roth IRA last year.

This really offends me, since I did the roll-over 2007 July 26, so they had plenty of time to mail me that form by 2008 January 31. In checking my tax return for the year 2007, I see that I did enter this information on my tax return already, so I guess I do not need to file an amended return. That information was on my 2007 FORM 1099R already.

So what is the 2007 FORM 5498 for? And why would they send it so late?
Print the post Back To Top
Author: aj485 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 100956 of 121438
Subject: Re: 2007 FORM 5498 Date: 5/31/2008 9:03 AM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 1
Yesterday, 2008 May 30, I got a 2007 FORM 5498 from my broker, TD Ameritrade, that says I better declare the value of the 100 shares of VZ I converted from my IRA to my Roth IRA last year.

If all you got was the form, you are misreading it. All it does is document that you did a conversion. Nowhere on the form itself: http://www.irs.gov/pub/irs-pdf/f5498_07.pdf does it say that you need to declare the value of the conversion on your taxes. All it does is document the fact that you did a conversion. Box 3 is entitled "Roth IRA conversion amount". Also note that there are other boxes like "Rollover contributions", "Recharacterized contributions", "IRA contributions (other than amounts in boxes 2 - 4 and 8 - 10)" and "Fair market value of account".

This really offends me, since I did the roll-over 2007 July 26, so they had plenty of time to mail me that form by 2008 January 31. In checking my tax return for the year 2007, I see that I did enter this information on my tax return already, so I guess I do not need to file an amended return. That information was on my 2007 FORM 1099R already.

No need to be offended. As you note, the information that was needed for your tax form was already sent to you on Form 1099R.

So what is the 2007 FORM 5498 for? And why would they send it so late?

The 2007 Form 5498 is required to be sent by the trustee of your IRA account(s) to both you and the IRS to document activity attributable to 2007 in your IRA account(s). The requirement is that it be sent to you and the IRS by June 2, 2008 (normally June 1, but since June 1 falls on a Sunday, the requirement is moved to June 2). This is so that 2007 contributions (normally allowed until April 15, 2008) can be documented. For those who receive extensions for contributions and contribute after April 15, 2008, contributions will be noted on their 2008 (or later) Form 5498, with an explanatory code.

No matter what type of IRA you have (Roth, Traditional, SIMPLE, etc.) you should get one of these forms from every trustee each year. It just may be that you haven't noticed them in the past because you haven't done any conversions.

AJ

Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post Back To Top
Author: JeanDavid Big funky green star, 20000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 100957 of 121438
Subject: Re: 2007 FORM 5498 Date: 5/31/2008 10:45 AM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
If all you got was the form, you are misreading it. All it does is document that you did a conversion. Nowhere on the form itself: http://www.irs.gov/pub/irs-pdf/f5498_07.pdf does it say that you need to declare the value of the conversion on your taxes. All it does is document the fact that you did a conversion. Box 3 is entitled "Roth IRA conversion amount". Also note that there are other boxes like "Rollover contributions", "Recharacterized contributions", "IRA contributions (other than amounts in boxes 2 - 4 and 8 - 10)" and "Fair market value of account".

I did not get the exact form; I got the one they generated themselves that has the same information. Box 3 was non-zero and box 5 was also non zero. I am not sure why I need the fair market value of the account.

But at the bottom are two lines that say "This is important tax information that is being furnished to the ...(IRS). If you are required to file a return, a negligence penalty.... This does not appear on the government supplied form, so it may just be a CYA imposed on Ameritrade by their lawyers.

No matter what type of IRA you have (Roth, Traditional, SIMPLE, etc.) you should get one of these forms from every trustee each year. It just may be that you haven't noticed them in the past because you haven't done any conversions.

I did not get get one of these forms ever (until yesterday), although I have done four conversions. The first was when I first set up the Roth IRA. The second was in 2006. The third was in 2007. The last (probably) was in 2008, so I do not expect one of these forms until sometime in 2009, I guess.

Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post Back To Top
Author: aj485 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 100958 of 121438
Subject: Re: 2007 FORM 5498 Date: 5/31/2008 11:57 AM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 2
I did not get the exact form; I got the one they generated themselves that has the same information. Box 3 was non-zero and box 5 was also non zero.

They likely filed electronically. When filing electronically, they are allowed to send a substitute paper form to you.

I am not sure why I need the fair market value of the account.

Because that's what the IRS requires. For those IRAs that are subject to RMDs, the fair market value is used to calculate the RMD. Rather than have the trustee try to sort out which IRAs are subject to RMD and which aren't, the IRS just has them send the fair market value on all IRAs.

But at the bottom are two lines that say "This is important tax information that is being furnished to the ...(IRS). If you are required to file a return, a negligence penalty.... This does not appear on the government supplied form, so it may just be a CYA imposed on Ameritrade by their lawyers.

Yes, it appears to be a CYA. But they are just stating the facts - the information is being sent to the IRS, and if you did not include the information on your tax return, you would be subject to penalties.

I did not get get one of these forms ever (until yesterday), although I have done four conversions. The first was when I first set up the Roth IRA. The second was in 2006. The third was in 2007. The last (probably) was in 2008, so I do not expect one of these forms until sometime in 2009, I guess.

I doubt that you have never gotten a Form 5498 in the past if you have any type of IRA, as trustees have been required to send them since at least 1989 - here is a revenue bulletin dated in 1989 stating the requirement: http://www.irs.gov/pub/irs-tege/rp89_52.pdf - look at Section 2.

However, they may have been in different formats, so you may not recognize it as the same form.

If you truly have never received this form in the past, then your trustee has apparently been breaking the rules for many years.

AJ

Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post Back To Top
Author: AlisonWonderland Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 100959 of 121438
Subject: Re: 2007 FORM 5498 Date: 5/31/2008 12:08 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
trustees have been required to send them since at least 1989 - here is a revenue bulletin dated in 1989

Thanks, AJ. I'd been wondering how long those forms have been in existence. I didn't think they'd been issued as early as I'd opened an IRA. Gotta go back and check those early records.

~~ Alison

Print the post Back To Top
Author: xraymd Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 100960 of 121438
Subject: Re: 2007 FORM 5498 Date: 5/31/2008 12:42 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
The 2007 Form 5498 is required to be sent by the trustee of your IRA account(s) to both you and the IRS to document activity attributable to 2007 in your IRA account(s). The requirement is that it be sent to you and the IRS by June 2, 2008 (normally June 1, but since June 1 falls on a Sunday, the requirement is moved to June 2). This is so that 2007 contributions (normally allowed until April 15, 2008) can be documented. For those who receive extensions for contributions and contribute after April 15, 2008, contributions will be noted on their 2008 (or later) Form 5498, with an explanatory code.

No matter what type of IRA you have (Roth, Traditional, SIMPLE, etc.) you should get one of these forms from every trustee each year. It just may be that you haven't noticed them in the past because you haven't done any conversions.


Greetings, aj485, on a side note your explanations here have answered a question that arose for me when I received, on 5/30/08, a related form: 2007 Form 5498-SA. This was sent to me by the credit union that holds my HSA. In this case, Box 3 was titled "Total HSA or Archer MSA contributions made in 2008 for 2007" and Box 5 was titled "Fair market value of HSA, Archer MSA or MA MSA at the end of 2007."

So it seems that HSAs may be subject to similar reporting rules for IRAs given that they are ultimately to be treated akin to IRAs. I need to re-read the rules but will later deductions after age 65 NOT spent on medical care be subject to taxes at the then-applicable rates?

xraymd

Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post Back To Top
Author: aj485 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 100962 of 121438
Subject: Re: 2007 FORM 5498 Date: 5/31/2008 2:09 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 2
So it seems that HSAs may be subject to similar reporting rules for IRAs given that they are ultimately to be treated akin to IRAs. I need to re-read the rules but will later deductions after age 65 NOT spent on medical care be subject to taxes at the then-applicable rates?

Correct. Withdrawals from HSAs at age 65 or older that are not for medical expenses are taxable at ordinary income rates, but there is no penalty.

AJ

Print the post Back To Top
Author: ptheland Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 100963 of 121438
Subject: Re: 2007 FORM 5498 Date: 5/31/2008 3:02 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 3
So what is the 2007 FORM 5498 for?

Form 5498 reports the contribution side of your IRA account. It tells the IRS what you put into any of the types of IRAs. (Form 1099-R reports the distributions from these accounts.)

It also reports the fair market value of your account as of December 31 each year. This is the amount needed to calculate any required distributions.

And why would they send it so late?

Because you can make contributions to your IRA so late.

Recall that you can make IRA contributions until April 15 of each year. (And SEP IRA contributions can be made as late as October 15. But late contributions there get a special code on the next year's form.) So custodians can't report contributions for a calendar year until sometime after April 15. And the custodians naturally need a bit of time to process all of these reports. So the deadline is May 31 of each year.

--Peter

Print the post Back To Top
UnThreaded | Threaded | Whole Thread (8) | Ignore Thread Prev Thread | Next Thread
Advertisement