How does the issuing Finacial institution correct a 1099-R when there should not have been one in the first place? It was a fee and not a distribution of $25.00 (an IRA fee).
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was box 2 left blank? then the simple thing to do is to enter it and since box 2 is blank you will pay no tax on it.
the other thing is to ask the FI to reissue indicating it's void
No box 2 was not left blank unfortunately. Is voiding a 1099-R common pratice?
Thank you Mike9241
So you have a 1099-R with $25 in Box 1 for Gross Distribution and also $25 in Box 2 for Taxable Amount?
If so, the Code in Box 7 of your 1099-R may offer a clue as to why it was issued to you.
Financial Institutions do sometimes need to issue 'Corrected 1099-R's'.
If you believe yours is in error, contact your Financial Institution.
Code in Box 7= normal distribution,
I think the error came about because of the posting in the statement was entered incorrectly as a distribution rather than a fee. When I get over my cold I will try and go and talk with the account representative or the accounting department. Thanks
It is likely that the broker won't want to correct the form. In that case, you could leave it off of the tax return, as you aren't required to report income that you didn't receive. The tax on it is so small the IRS may not take issue with it. Also, you could enter it and pay the minimal tax of less that $5 most likely. You could also report the income then enter a nagative entry for the same amount to income by following these steps in TurboTax:
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