This interview will help you determine if you should report on your tax return assets (cash or property) moved from one IRA or retirement account to another. This topic doesn't address the recharacterization (correction) of a contribution from one IRA to another. You'll need to run the interview for each rollover or transfer event separately.
Information You'll Need
- The type of retirement plan the distribution was made from and moved to (e.g. traditional IRA, Roth IRA, qualified employee plan other than a designated Roth account). You may need to check with your IRA trustee or retirement plan administrator to determine the account type.
- Whether or not you have a cost basis to recover. Your cost basis consists of previously taxed amounts. Previously taxed amounts include nondeductible IRA contributions or after-tax contributions made to an employee retirement plan.
- If the assets weren't moved directly from one account to the other, you'll also need:
- The number of days between the date the distribution was taken from one account and deposited into the other.
- Whether a previous tax-free rollover occurred with 12 months of the distribution.
- Whether federal income tax was withheld from the distribution (Form 1099-R (PDF)).
The tool is designed for taxpayers that were U.S. citizens or resident aliens for the entire tax year for which they're inquiring. If married, the spouse must also have been a U.S. citizen or resident alien for the entire tax year. For information regarding nonresidents or dual-status aliens, please see International Taxpayers.
Caution: For 2019, this topic doesn't include the recently passed legislation affecting the exception to additional tax relating to the medical expense deduction. This new legislation returned the medical expense deduction floor to 7.5%. Prior to this legislation the floor was at 10%. Also, for 2018 and 2019, this topic doesn't include the recently passed legislation that provides the amount of a qualified disaster distribution may be recontributed to an eligible retirement plan within three years. Until the updates can be made, please see H.R. 1865, "Further Consolidated Appropriations Act, 2020", Division Q.
Conclusions are based on information provided by you in response to the questions you answered. Answers do not constitute written advice in response to a specific written request of the taxpayer within the meaning of section 6404(f) of the Internal Revenue Code.
Estimated Completion Time: 15 minutes
Please Note: After 15 minutes of inactivity, you'll be forced to start over.
Caution: Using the "Back" button within the ITA tool could cause an application error.