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If the transaction occurred in 2010, you should have the 1099-R already.
Are you sure this was completed in 2010?
If you rolled the $5,000. into a Roth IRA there is no penalty.
Oh well. Yes, it was completed in 2010 like I said, and like I said the brokerage firm told me they won't have the 1099-R out until 2011.
This is 2011?
2011 for 2010?
or 2012 for 2011?
They just said the 1099-R won't come out until later this year. I asked them to check and they had no answer.
OK hold on a minute while I check something.
what is the code in Box 1 of the 1042-S?
OK, well the 1042-S supports the withholding, so yes you can report the distribution as an IRA distribution.
But won't that mean I'll have to pay the 10% early withdrawal penalty?
I mean, it is a rollover and the money is all in a Roth IRA. So would I pay and then get a refund of the penalty next year or something? Seems weird.
No. You realize that you have the option of reporting 50% of the income in 2011 & 50% in 2012?
There's no penalty on a rollover to a Roth. You didn't keep the money.
I understand there's no penalty on a rollover to a Roth, but without a 1099 R how is the IRS ever going to believe it? Do I just tell them and then prove it later on when I (finally) get the 1099 R?
About the income, I have a lot of deductions in 10 and I want the income there anyway.
The same way they believe anything else. The only time there's a problem is if things don't match to your tax return. I have a feeling that your brokerage firm is sending the 1099-R for 2011 & 2012?
Sounds very possible that that's what the brokerage firm is doing. But in the meantime if I report a rollover and the IRS does not find that the brokerage firm reported it yet they will NOT like it.
Well I supposed you could file Form 5329 & indicate that you qualify for an exception to the penalty. A direct rollover from Trustee to Trustee is not considered a withdrawal.
The IRS isn't going to have anything that tells them anything to the contrary in regards XXXXX XXXXX conversion.
The 5329 isn't used for this purpose, so it isn't required. There's no exception that's applicable as the rollover doesn't require any penalty. Code 11 - other is an option, but the instructions for that code aren't applicable to your siutuation.
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Steve, you worked hard it's true but I am nowhere near closer to an answer than I was at the start.
Hello Form 5498 includes all regular and Roth IRA contributions for the previous tax year and all regular and Roth IRA contributions made through April 15, 2011 attributed to the 2010 tax year. The 5498 Form is your proof of the Conversion from Trad IRA to ROTH IRA. You will need to show the conversion on your 2010 tax return as well as the withholding that has already been applied. It is true that you can generally split the conversion and pay half the tax on the 2010 return and then half on the 2011 return, you will want to see if doing that is to your best interest. Do your 2010 return both ways (50% and 100%) and see if the 30% withholding is enough to cover for 2010 so you will not need to go through this process again for 2011 taxes.
Form 5498 is for informational purposes only and it is not to be filed with your tax return. The IRS received a copy of this form already.
I hope this additional information is helpful. What you completed was a conversion and not a rollover. It is true that you will not be penalized the 10% extra.