@goyal_raj wrote:
Checked with Vanguard again and after multiple rounds of back and forth with their tax dept they tell me that since the earnings accrued in 2020 (even though the contribution was for 2019) the code shall be 81 only and it is taxable in 2020. If it accrued in 2019 then it would be for 2020. I told them about IRS publication 590A.
What choice do i have now? Go with what VG says or add a substitute 1099R with the earnings on 2019 tax return? And in which year do i send the 5329?
Thanks,
That is the rules for a 401(k) type plan. I quoted the actual IRS rules for reporting the earnings for an IRA.
Did you ask them if they think this is a 401(k) type plan and not an IRA?
I would ask for their discussion in writing so if the IRS challenges the incorrect reporting, you would have their answer in writing to send the IRS.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
