How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Anne Your Own Question

Anne
Anne, Master Tax Preparer
Category: Tax
Satisfied Customers: 1703
Experience:  Enrolled Agent with 25 Years Experience specializing Individual and Small Businesses
Type Your Tax Question Here...
Anne is online now
A new question is answered every 9 seconds

A client of mine has investments. During the tax year, some

Customer Question

A client of mine has investments. During the tax year, some of these investments were transferred from one AXA Equitable Life ins account to Wachovia Sec. The money never touched her hand it was an paper transfer. AXA has sent her 1099R's with 7 dist code saying all of this is taxable. How do I go about preparing her return, as she did not receive this money. These are not IRAS, from all knowledge I have, they are annuities. Help!
Submitted: 5 years ago.
Category: Tax
Expert:  Anne replied 5 years ago.

HiCustomer/p>

 

Thank you for using justanswer. Although its unfortunate that AXA reported this as a distribution, its really a fairly common occurence, and easily dealt with. When you fill out the tax return, you only need to show the $ amount shown in box 1 of the 2008 Form 1099-R (Gross Distribution) on line 16A (Pensions and Annuities) of theForm 1040 in Adobe PDF Format. Line 16b of the Federal 1040 form should have a 0 on it, with the word "rollover" written on the line 16. (Some tax software will write that in for you automatically based on the answers to the questions they ask, and some won't. If your software doesn't do that, just write it on by hand.) . You should then keep the paperwork showing where the money was rolled to with the tax return, in case the IRS ever asks to see them.

 

By law your client would have 60 days to roll over 1 annuity to another one, and the institution that held the original annuity would not have necessarily known the money was rolled over, so they would have correctly reported a distribution of the whole annuity. (I understand that wasn't the way this was supposed to be reported ) I bring this up so that you can see that just because there is an amount in box 2 of the 1099R showing a taxable distribution, IRS knows that there could have been a rollover within 60 days. They just need to see it on the tax return, and following the steps above will show them that.

 

I hope this helps you.

 

If you have found my answer helpful, please click the green "accept" button as it is the only way we get paid.

 

Positive feedback and bonuses are always appreciated.

Anne, Master Tax Preparer
Category: Tax
Satisfied Customers: 1703
Experience: Enrolled Agent with 25 Years Experience specializing Individual and Small Businesses
Anne and 7 other Tax Specialists are ready to help you
Expert:  Bill replied 5 years ago.

If the funds moved from one nonqualified annuity contract to another annuity contract then that was a Section 1035 exchange not a rollover. The client should attach a statement to the return explaining the transaction and that it was a 1035 exchange. If it is reported as a rollover then the IRS may be looking for a Form 5498 (which an IRA trustee issues when a rollover is received).

 

See page R-2 regarding Section 1035 exchanges - http://www.irs.gov/pub/irs-pdf/i1099r_07.pdf

 

See page 18 - http://www.irs.gov/pub/irs-pdf/p575.pdf

 

Expert:  Anne replied 5 years ago.

Hi againCustomer/p>

 

Bill has a point. I took your question at face value when you said they were both annuities, but if there's any question about whether or not the life insurance annuity is qualified or non qualified, you will want to find out so that you handle the tax situation correctly.

 

Since our goal here is to give you our best, XXXXX XXXXX information in helping you find an answer to a particular question, I thank Bill for his input on this.

 

 

Customer: replied 5 years ago.
accepted first answer. thank you

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Last | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
 
 
 

Meet The Experts:

 
 
 
  • Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
< Last | Next >
  • http://ww2.justanswer.com/uploads/KU/KUMI95/2013-9-30_195031_kumar.64x64.jpg Wallstreet Esq.'s Avatar

    Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
  • http://ww2.justanswer.com/uploads/CU/Cuttinggirl/2011-10-29_03719_wcrop2.64x64.jpg Wendy Reed's Avatar

    Wendy Reed

    Enrolled Agent

    Satisfied Customers:

    3052
    15+ years tax preparation and tax advice.
  • http://ww2.justanswer.com/uploads/CATax/2009-08-04_204548_Mark.jpg Mark D's Avatar

    Mark D

    Enrolled Agent

    Satisfied Customers:

    985
    MBA, EA, Specializing in Business and Individual Tax Returns and Issues
  • http://ww2.justanswer.com/uploads/IN/insearchoftheanswer/2013-8-16_0233_attorney.64x64.jpg Richard's Avatar

    Richard

    Tax Attorney

    Satisfied Customers:

    3229
    29 years of experience as a tax, real estate, and business attorney.
  • http://ww2.justanswer.com/uploads/MY/MyVirtualCPA/2012-7-5_44024_cookmegan1.64x64.jpg Megan C's Avatar

    Megan C

    Certified Public Accountant (CPA)

    Satisfied Customers:

    6121
    Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
  • http://ww2.justanswer.com/uploads/JG/jgordosea/2012-6-7_43138_GordosVeritas.64x64.jpg jgordosea's Avatar

    jgordosea

    Enrolled Agent

    Satisfied Customers:

    2783
    I've prepared all types of taxes since 1987.
  • http://ww2.justanswer.com/uploads/OZ/ozaukeecpa/2012-6-7_193219_Picture1croppedandshrunk.64x64.jpg MequonCPA's Avatar

    MequonCPA

    Certified Public Accountant (CPA)

    Satisfied Customers:

    2231
    CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.