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I got a letter from the IRS about my 2015 return, and of course they want like 4000 dollars.

Anyway, Timeline: Dec. 2015 I took a distribution from an IRA and put it back in the account a month later in Jan 2016. I also took a Roth distribution in Dec 2015 for a qualified first-time-home buyer.

So the way to do this according to the Exception 5 in instructions--and the way t tax did it-- would be to put on 1040 line 15a the total amount of the distribution and on 15b Taxable Amount "ROLLOVER" and 0 on 15b, no?


Yes, that's the correct reporting treatment.

I attached 5329 and 8606 were attached for the Roth. But the IRA just counts as a 60 qualified rollover and was indicated as such on my 2016 5498.

So why didn't they see that and are treating the rollover as unreported? I guess maybe because it was in a different year -- albeit within the 60 safe harbors -- they only checked 2015 5498?


Yes, that would be the problem. So you should respond to their notice and include as supporting documents (1) a copy of the distribution check, and (2) a copy of the deposit advice or account statement showing the redeposit occurred within 60 days.

Bill
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