Maybe I’m making it more complicated than it needs to be. To me, the fees should have been rolled over or re-deposited into the IRAs. On the Roth IRA, I think this is technically an early withdrawal. Since you can withdraw Roth money up to the amount of original principle that you contributed without paying any tax, I would think the entire Roth amount is non-taxable as long as it is less than what you originally contributed. The traditional IRA amount seems to me like it should be reported as an early distribution and you owe income tax on the entire amount plus a 10% early withdrawal penalty.
But, there isn’t any way I can think of to actually report those things properly. The closest you can come, I think, is to ignore the Roth amount and treat it as a tax free distribution. Report the entire amount from the regular IRA as taxable income. You can report it as “other interest income not reported on a 1099”.
@dmertz do you have a better idea?
