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Retirement tax questions
There is no early-distribution penalty on a regular distribution of $6,000 because it's a distribution of Roth IRA contribution basis even though it was an excess contribution. In addition to the $6,000 appearing on Part IV of your 2021 Form 5329 the $6,000 will appear on Part III of your 2021 Form 8606 to calculate a taxable amount of $0. Since the taxable amount is $0, there is no early-distribution penalty either.
March 17, 2021
3:37 PM