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<< Am I correct in assuming that the monthly amount is a distribution, and therefore reported as retirement income? >>

It sure sounds like it. You should receive a 1099-R for the distributions. One thing to keep in mind about IRA rules: receiving retirement benefits from a former job does not constitute being "covered" by a retirement plan.

It might make more sense for you to fund the IRA with other funds and just take the retirement distribution in cash. Remember that these distributions do not increase the $2,000 annual contribution limit and that there must be current earned income to contribute to an IRA.

Phil Marti
Tax Preparer
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