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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16576
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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Hi, I have Retirement Time Account with Wells Fargo which was

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Hi, I have Retirement Time Account with Wells Fargo which was opened around 2000. I opened the account by writing a check and did not take any tax deduction, now that I am over 70 funds MUST be withdrawn. My problem is that Wells Fargo has no records on the initial deposit in that account since it was so many years ago. And I do not want to pay taxes on the principal as well. How do I avoid paying taxes on the principal?

MyVirtualCPA :

Thanks for asking your question! I'm sorry to hear about your tax issue and I'm going to try my best to help you understand or resolve it.

MyVirtualCPA :

Wells Fargo may tell you that they do not have a record of your deposit, which might be true if you are going to a branch or calling into the 1-800 number, but they will have a record in their retirement account department

MyVirtualCPA :

When they send you your 1099 at the end of the year showing your withdrawals, it will tell you what portion of it is taxable vs nontaxable

Customer:

Yes, they sent me a 1099 and they said that everything withdrawn last year was taxable which is not true.

MyVirtualCPA :

Do you have records of your initial deposit?

Customer:

Do I have record? No! The check was written on my Chase bank account and they said they only keep records for seven years.

MyVirtualCPA :

Unfortunately without records from Wells Fargo or records that you have maintained, you will have to go by what is on the 1099.

MyVirtualCPA :

Do you possibly have your bank statements saved somewhere?

Customer:

It is possible that I have records somewhere in some old box! It was a large check and it would be reasonable for me to have kept it. But one does not always do what is the best thing.

MyVirtualCPA :

I know, one wouldn't think they would need their records for more than 7 years

MyVirtualCPA :

Do you remember that year when you filed your tax return if you filed form 8606 with the IRS?

Customer:

So what do I do now? I very much appreciate your kindness and your advice but I have not actually learned anything I did not know already (smile).

MyVirtualCPA :

Unfortunately, you will have to pay the tax on the withdrawal, unless you can otherwise prove you made the contribution.

Customer:

I do remember that I did not file any form 8606. Wells Fargo might have a record of when the account was opened.

MyVirtualCPA :

They really should

MyVirtualCPA :

They should be the ones helping you get this resolved, because it's their responsibility to keep track of this - not yours

Customer:

Thanks for this.

MyVirtualCPA :

You're welcome. I'm sorry I don't have a magic bullet

Customer:

OK, wishful thinking on my part!

MyVirtualCPA :

I understand

Megan C and 2 other Tax Specialists are ready to help you
Thank you for your positive rating. Please come back and visit MyVirtualCPA for any of your tax, finance, or social security needs. It was a pleasure working with you today.
Customer: replied 3 years ago.

Many thanks!