Level 3

Transferring money from IRA to CDs

Forum|Forum|3 years ago
March 29, 2023
1 reply
16 views

Hi everyone,

One of my clients received form 1099-R for an IRA distribution, with a Code 1 for early distribution - no known exceptions. Box 2a indicating taxable amount is same as Box 1 of total distribution, but Box 2b for "taxable amount not determined" is checked. The taxpayer is younger than 59.5, so should be subject to the 10% penalty. I asked about it, and per my client "My financial person, transfered the cash that was sitting in IRA to CDs. I didn't take the contribution and he said there wouldn't be any tax implications." If these were IRA CDs, not just regular CDs, that statement should be correct, right? I will confirm with her if these were IRA CDs.

And if they were IRA CDs, did the broker not code the distribution right for the 1099?

Thank you

This topic has been closed for replies.

qbteachmt

Level 15

Point out the transfer first is "account type" to "account type." Then it gets invested.

So, is the money in an IRA account?

Or not?

Don't yell at us; we're volunteers

M

MikiDAuthor

Level 3

The money is in an IRA account; they deposited the funds back after about a month so this should be rollover. My question now is, how do I override the current entries in Lacerte, mostly distribution code 1 so that it shows rollover and that none of it should be taxed and eliminate the penalty?

dkh

Level 15

Enter 1099R as received including the distribution code 1 - scroll down then to section for entering Rollover information

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