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Author: melanieuy Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 120809  
Subject: IRA transfer then early distribution Date: 3/6/2000 6:50 PM
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I know, all of my postings here indicate that I have not been the wrong kind of financial "fool." But reading these boards is helping to get me back on track with my finances -- thank you all!

I have one more tax question:
Last year I transferred all of the money in my traditional IRA account (at Fidelity) to a new Roth IRA account at a different company (Citibank). The funds were transferred from Fidelity directly to Citibank (I never received any check).

But three months later I was stupid and withdrew the amount in the new Citibank IRA account. It is an early distrubution, and I have to pay tax and penalties, I know.

My question is, do I also have to pay for the initial conversion from the traditional IRA to the Roth one? Where would I report this on my tax return? I contacted Fidelity, and they said there was no distribution involved and that's why they didn't send a 1099-R. The 1099-R from Citibank gives me the info I need to report the early distribution, but not the conversion to a Roth.
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Author: pmarti Big funky green star, 20000 posts Home Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 31055 of 120809
Subject: Re: IRA transfer then early distribution Date: 3/6/2000 8:16 PM
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<< Last year I transferred all of the money in my traditional IRA account (at Fidelity) to a new Roth IRA account at a different company (Citibank). The funds were transferred from Fidelity directly to Citibank (I never received any check).

But three months later I was stupid and withdrew the amount in the new Citibank IRA account. It is an early distrubution, and I have to pay tax and penalties, I know.

My question is, do I also have to pay for the initial conversion from the traditional IRA to the Roth one? Where would I report this on my tax return? I contacted Fidelity, and they said there was no distribution involved and that's why they didn't send a 1099-R. The 1099-R from Citibank gives me the info I need to report the early distribution, but not the conversion to a Roth. >>

Something's screwy here. A trustee-trustee transfer from Fidelity to Citibank would not involve a 1099-R, nor would it be a conversion to Roth. Are you sure you didn't transfer the traditional IRA to Citibank and then convert it?

In any case, you report the conversion to Roth in Part II of Form 8606 and the distribution from Roth in Part III of Form 8606. You should ultimately wind up with the gross amount of the distribution on line 15b of the 1040 and 10% of it on line 53 of the 1040.

Phil Marti
Tax Preparer

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