Form 5329 Not Calculating a Penalty

Ali · ‎03-21-2019

Client took early distributions from traditional IRA from various sources. Some were rolled over within 60 days, others were not. On 1099-R Worksheet, I checked box B1 for those that were rolled over and left it blank for those that were not. No penalty is being calculated on the early distributions not rolled over. What have I done wrong?

IntuitCharlene · ‎03-21-2019

The 5329 would only show a penalty for any taxable transactions. If there is Basis on the IRA Information Worksheet that is greater then the distribution the 8606 line 15 will show the taxable portion. Only the taxable portion from line 15 flows to the 5329 for the 10% additional tax.

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Ali · ‎03-21-2019

Thank you. That's it! I forgot they had basis in the IRA.

IntuitCharlene · ‎03-21-2019

I'm glad we were able to find what was making it non-taxable! It's often easy to forget about the Basis being on a different worksheet. Have a great day and thanks for stopping by our AMA Session!

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