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Stephen G.
Stephen G., Sr Income Tax Expert
Category: Tax
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Experience:  Extensive Experience with Tax, Financial & Estate Issues
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Taxpayer age 55 withdraws $25k from her Vanguard IRA (2015)

Customer Question

Taxpayer age 55 withdraws $25k from her Vanguard IRA (2015) and has the $25K send to her Vanguard money market account 48 hours later. The taxpayer then writes $25K to the new IRA custodian. Vanguard (Original IRA Custodian) sends taxpayer 1099-R. Taxpayer tells me that those $25K will have to be declared income because of 1099-R. Another issue is that taxpayer is under 59 1/2 and law states that you can't do what Taxpayer did. By the way, receiving IRA-Custodian will generate Form 5498, but not until May of this year. ...past tax filing time. Question: Is taxpayer liable to have to declare the $25K as income for 2015.
Submitted: 8 months ago.
Category: Tax
Expert:  Stephen G. replied 8 months ago.
What law are you talking about?The taxpayer can use her IRA money for 60 days every year as long as she rolls it into another IRA within the 60 days.The 25K isn't taxable, it's reported on her tax return on line 15(a) $25,000. & 15(b) is -0-
Expert:  Stephen G. replied 8 months ago.
Just Checking in....................Do you have any follow-up questions?If not, please remember to rate my response as that is the only way we receive credit for our work.Steve G.