Level 4

Solved

Taxable portion of early distribution from Roth

Forum|Forum|5 years ago
January 31, 2021
21 replies
58 views

I have a taxpayer that has had a Roth for many years. Recently the brokerage house changed so the new one does not have the basis of the contributions. He received an early distribution in 2020. The 1099 reflects Taxable amount unknown. How can I reflect the basis so the full amount will not be taxable and not subject to the 10% penalty.

ProSeries Basic

This topic has been closed for replies.

Best answer by Terry53029

Hallelujah!!!!! OMG! I have literally tried to work this out for HOURS! Learned my lesson! Just ask Terry! You don't know how much I appreciate this!

I accept cookies 😁

IRonMaN

Level 15

That's easy ------------------- just have him come up with his basis. Ok, maybe it's not that easy, but that is the only way to make it avoid potential tax.

Slava Ukraini!

P

PChinAuthor

Level 4

I am just trying to figure out how to enter this in Pro Series so the full amount, only the taxable amount is subject to the tax and penalty.

qbteachmt

Level 15

Basis would be contributions. That means statements, transactions listings, and/or a transcript from the IRS for 5498 would all show the deposit amounts for each year.

Don't yell at us; we're volunteers

T

Terry53029

Intuit Community Champion

You need to know the basis, and your client has to come up with that info. The distribution if nonqualified has ordering rules: basis first, then earnings that is why you need basis.

P

PChinAuthor

Level 4

I understand the distribution rules but ProSeries is throwing the entire amount in taxable. How do I record only the taxable amount in the income column.

dkh

Level 15

Note the common theme.....have the CLIENT determine the basis. Let them spend the time chasing the info. Sometimes my clients think that it's my responsibility to do the leg work....Nope.

P

PChinAuthor

Level 4

I know the basis. I am trying to figure out how to adjust the taxable amount and the amount subject to the early withdrawal penalty.

T

Terry53029

Intuit Community Champion

@PChin you must have taken @IRonMaN mind reading class, as you now know the basis. Just scroll down on the 1099R worksheet, and there is a place to enter basis

Sign up

Login with SSO

Let's get you signed in

Login with SSO