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Orchid09
FiLifer
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Orchid09 asked about a year ago in 401k Plans

IRA Distribution.

I read your answer to the question: "If I liquidate IRA mutual funds (and have the checks issued in my name) and I reinvest all of the money in a bank CD IRA within 60 days, will I be fined by the IRS?" It was the answer I've been looking for. My only question is: Will I have to report this money on my taxes or not? I received the 2008 1099-Rs for both

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Michael Kitces
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Orchid09,
It is probably a good idea to go ahead and report the gross amount of the distribution on your tax return. However, in the section where you report the "taxable" amount of the distribution, you can report that the taxable amount was $0 since you rolled the full amount over. This allows the IRS to confirm that you did take money out (and match it to the 1099-R), while also confirming that you did roll the money over and therefore have no tax liability.

At some point you should also receive a Form 5498 from the new IRA custodian, reporting/confirming that they received an IRA rollover and substantiating that therefore you do not owe any income taxes.

I hope that helps a little!

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