The Motley Fool Discussion Boards

Previous Page

Financial Planning / Tax Strategies


Subject:  Re: K-1 Section 751 statement Date:  2/25/2009  6:47 PM
Author:  drippinfool Number:  104713 of 127753

"Code 2 in Box 7 of a 1099-R indicates that this is a premature distribution not subject to the premature distribution penalty. If you look at the back of the 1099-R you'll see that no 5329 is required.


With all due respect, I don't see that on the back of the 1099-R. What I see is a reference to the instructions for Form 5329.

Who Must File
You must file Form 5329 if any of the following apply, except you do not have to file Form 5329 to report a qualified disaster recovery assistance distribution, a qualified recovery assistance distribution, or the timely withdrawal of an economic stimulus payment that was directly deposited into your tax-favored account (see Economic stimulus payments on this page).
• You received an early distribution from a Roth IRA, the amount on line 23 of Form 8606, Nondeductible IRAs, is more than zero, and you are required to enter an amount that is more than zero on Form 5329, line 1 (see Exception for Roth IRA Distributions on page 2).
• You received an early distribution from a qualified retirement plan (other than a Roth IRA) and distribution code 1 is not shown in box 7 of Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.
Note. You do not have to file Form 5329 if distribution code 1 is correctly shown in box 7 of all Forms 1099-R and you owe the additional tax on each Form 1099-R. Instead, see the instructions for Form 1040, line 59, or Form 1040NR, line 54, for how to report the additional 10% tax directly on that line.

(emphasis added)

I received an early distribution from a qualified retirement plan other than a Roth IRA (I believe my traditional IRA qualifies.) and

Distribution code 1 is not shown in box 7 of Form 1099-R (it is distribution code 2)

Am I misreading or misinterpreting these instructions?

I am not trying to be argumentative, I'm just trying to understand. If you are kind enough to respond to this, I won't bother you with this issue any further. Thanks again, and I wouldn't be asking if I didn't value your opinion.

Copyright 1996-2018 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us