Where on the return do I report Keough distributions.

[Randy Haynes]

Do I report Keough distributions on Schedule 1 as Other Income"? The recipient is over 59. 5 in age, so I know there is no penalty, but I am just not sure where they are reported in the return as no 1099-R is generated for Keough distributions..

[sjrcpa]

It is a pension and there should be a 1099-R.

[Randy Haynes]

That is not what my research reveals. Note bullet point 5 below.

Who receives a 1099-R?

• Contract owners with reportable distributions from their annuities during the previous calendar year will receive a 1099-R. For more information, see "What is the difference between a reportable and taxable distribution?" below.
• If applicable, a 1099-R is mailed to the contract owner's address of record. For clients enrolled in electronic delivery, notification of 1099-R availability on the website is sent to the email address on record.
• The information on the 1099-R is based on the contract owner, not the annuitant (except for 457(b) government entity-owned contracts).
• If the contract has joint owners, the 1099-R is issued to the primary owner.
• A 1099-R is not generated on corporate-owned nonqualified, 401(k), Pension, Keogh, 457(b), or 501(c)(3) not-for-profit entity-owned contracts.
• A 1099-R is also not generally generated if your contract is held by a custodian company. In this case, please contact your custodian for your 1099-R.

[sjrcpa]

"corporate-owned nonqualified, 401(k), Pension, Keogh, 457(b), or 501(c)(3) not-for-profit entity-owned contracts"

Not sure what a corporate owned nonqualified Keogh contract would be. 

Where was the Keogh account held? Is it properly titled? I'm pretty sure somebody was supposed to issue a 1099-R.

Even if you don't have one, enter it as a pension distribution.

BTW-What is the source of that research?

[Accountant-Man]

I read this as "corporate owned" is the descriptor for:

Non qualified

401k

Pension

Keogh

457b

Or 501c3 not for profit 

Entity-owned contracts. 

Since when are 401ks entity owned?

[sjrcpa]

or 457(b).

It doesn't make sense.

And a Keogh is the old name for a self-employed person's retirement plan, so there is no corporation.

[Randy Haynes]

The entity is DR'S X, Y & Z PSP according to the financial data I was provided. The only thing that I can find seems to indicate that PSP is for "Priority Setting Partnership" an entity of which I am totally unaware.

My client is Doctor Z. He has no idea of the structure of the entity other than telling me that the only assets are the funds in Keough plans for each of the doctors involved.

When I asked him to get more information on the withdrawal of $230,000 he was told by the financial advisor "There are no 1099-R's generated. Attached please find March 2022 statement, on page 9 you will see your withdrawal. This is what the accountants use for tax purposes."

In the statement, there are records of holdings, sales, etc.  for the month of March only. That was the month of the withdrawal.

In my experience, I know that Keough plans are funded by pre-tax dollars, so it would be normal for all withdrawals (distributions) to be fully taxable. The problem is that in the details buried in the statement, there are funds shown with basis, sales with gains, etc. I am a total loss as to how to correctly report this on the tax return.

[sjrcpa]

PSP = Profit Sharing Pla.

Someone dropped the ball.

Whoever is the Plan Administrator, and it may be one of the docs, is supposed to issue 1099-Rs for withdrawals. That same person is also responsible for filing the annual 5500s.

[sjrcpa]

Regardless, report it as a retirement plan distribution.

[qbteachmt]

Keogh is qualified.

https://www.irs.gov/taxtopics/tc410

https://www.investopedia.com/terms/k/keoghplan.asp

The 1040 instructions tell you to report it on Line 5a. Not any schedule.

[Randy Haynes]

Thank you. that is what I plan to do. However, since there is no 1099-R, I have no EIN to put into the worksheet to avoid errors. Can I just enter it as "Other Income" on Schedule 1 with an explanation that it is a non-documented distribution from a Keogh?

[qbteachmt]

"Can I just enter it as "Other Income" on Schedule 1"

That's not where Pensions get listed.

"I have no EIN to put into the worksheet to avoid errors"

I though you told us it is Corporate owned. Somewhere there is a plan document, a check was issued, some sort of document explaining to your taxpayer his rights and coverage. I don't know if this requires an Annual Plan Summary, a Plan Document for those covered, there must be a Contract or annuity.

Make your taxpayer get hold of the ex-employer or dig through their papers.