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jjf2008
Level 3

IRA Contribution

Dear Friend,

 

In Nov 2019, my father made a $16,500 contribution for 2018 to an existing Traditional IRA.  The Plan Type is 457B.  On the Nationwide Form DC-4261 (09/2018), it is noted that: "Are you rolling over roth assets? No."  Also, on the Nationwide Form DC-4261 (09/2018), a statement read: "Total Account Balance is $99,000."

 

My question is where on 1040 SR should I show 

Since then my father passed away in Feb 2020, and I am trying to pick up the pieces for my elderly mother. 

 

So, any help you can provide is greatly appreciated. 

 

Thank you,

Al

4 Best answer

Accepted Solutions
macuser_22
Level 15

IRA Contribution


@jjf2008 wrote:

Dear Friend,

 

In Nov 2019, my father made a $16,500 contribution for 2018 to an existing Traditional IRA.  The Plan Type is 457B.  On the Nationwide Form DC-4261 (09/2018), it is noted that: "Are you rolling over roth assets? No."  Also, on the Nationwide Form DC-4261 (09/2018), a statement read: "Total Account Balance is $99,000."

 

My question is where on 1040 SR should I show 

Since then my father passed away in Feb 2020, and I am trying to pick up the pieces for my elderly mother. 

 

So, any help you can provide is greatly appreciated. 

 

Thank you,

Al


Your question is not clear.   IRA contributions cannot exceed $6,000, or $7,000 if  age 50 or older.

 

Is this a contribution or a distribution?

Do you have a 1099-R?    What code is in box 7?

Was it a retirement distribution that was rolled into an IRA?

 

A 457(b) plan is NOT an IRA.   

 

Contribution to a 457(b) plan would be reported on his W-2 form by his employer in box 12 with a code G - it is not reported anywhere else.

 

 

**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.**

View solution in original post

macuser_22
Level 15

IRA Contribution

"A $6,500 contribution was made in 2019 for 2018."

 

A contribution in 2019 *for* 2018 must be reported on the 2018 tax return, not 2019 either as a deductible contribution or a non-dedictible contribution reported on a 8606 form.

 

"In Jan-2020, the IRA was transferred from SunTrust Bank to Nationwide."

 

A transfer form one trustee to another trustee when the money is not sent to the account owner does not require  a 1099-R, but some trustees send one anyway.      If not 1099-R was issued then there is noting to report on the 2019 tax return.

 

"in case Nationwide puts two-and-two together and figured out the account owner is. "

Nationwide should be notified of the death immediately so that they will treat the IRA as inherited by the named beneficiaries or your fathers estate if there was no named benificuary(s).

 

The moment that he died, the IRA was no longer his, but belongs to the benificuary(s).

**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.**

View solution in original post

macuser_22
Level 15

IRA Contribution

I also suggest that you read IRS Pub 559 (Survivors, Executors, and Administrators) for a lot of good information about filing the final return and estate return and other requirements.

https://www.irs.gov/pub/irs-pdf/p559.pdf

If he is married then his surviving spouse can file a joint return in the year of death.  If the spouse is the benificuary of the IRA then a spouse can choose to roll the inherited IRA into their own IRA.

**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.**

View solution in original post

macuser_22
Level 15

IRA Contribution

Also:

 

"Nationwide Fix Account, Contribution Type: Rollover (Pre-Tax), Plan IRS Code: 457."

 

I have no idea what that means.   You should ask Nationwide to decode it for you.   If by chance that are saying that the money was transfer (rolled over) from a 457 type retirement plan, then a 1099-R is required but not by Nationwide but from the 457 plan trustee.    If the transfer (rollover) was done in 2020 then the resulting 1099-R will not be issued until January of 2021 and would be reported on your fathers final 2020 tax return if he died in 2020.

**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.**

View solution in original post

6 Replies
macuser_22
Level 15

IRA Contribution


@jjf2008 wrote:

Dear Friend,

 

In Nov 2019, my father made a $16,500 contribution for 2018 to an existing Traditional IRA.  The Plan Type is 457B.  On the Nationwide Form DC-4261 (09/2018), it is noted that: "Are you rolling over roth assets? No."  Also, on the Nationwide Form DC-4261 (09/2018), a statement read: "Total Account Balance is $99,000."

 

My question is where on 1040 SR should I show 

Since then my father passed away in Feb 2020, and I am trying to pick up the pieces for my elderly mother. 

 

So, any help you can provide is greatly appreciated. 

 

Thank you,

Al


Your question is not clear.   IRA contributions cannot exceed $6,000, or $7,000 if  age 50 or older.

 

Is this a contribution or a distribution?

Do you have a 1099-R?    What code is in box 7?

Was it a retirement distribution that was rolled into an IRA?

 

A 457(b) plan is NOT an IRA.   

 

Contribution to a 457(b) plan would be reported on his W-2 form by his employer in box 12 with a code G - it is not reported anywhere else.

 

 

**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.**

View solution in original post

jjf2008
Level 3

IRA Contribution

Dear Champ macuser_22 Level 15:

 

Okay, You are correct! I didn't want to give the real figures used on the IRA, in case Nationwide puts two-and-two together and figured out the account owner is. They send out the hounds to make unsolicited telephone calls.  At this point, I decided, "what the heck?", let them call.

 

Anyway, Champ macuser_22, here we go:

The existing Traditional IRA had a value $39,053.26 on 12/31/2019. A $6,500 contribution was made in 2019 for 2018. In Jan-2020, the IRA was transferred from SunTrust Bank to Nationwide.

 

You ask: Is this a contribution or a distribution?

Reply: Contribution existing, Traditional IRA.

 

You ask: Your question is not clear.

Reply: You always say that...  ...so, I have tried to fix that issue.  You be the Judge.

 

You ask: IRA contributions cannot exceed $6,000, or $7,000 if age 50 or older.

Reply: You are correct.  A $6,500 contribution was made in 2019 for 2018. He was 69 years and 8 months old at his passing this year.

 

You ask: Do you have a 1099-R?

Reply: No, I do not have a 1099-R for this item.   

 

You ask: [On Form 1099-R] What code is in box 7?

Reply: SunTrust Bank do not provide a 1099-R for this item. Should SunTrust Bank provide a 1099-R, if we did not cash- out or receive any monies from the IRA?  Should the IRA be listed on 2019 Form 1040 and where?

 

You ask: Was it a retirement distribution that was rolled into an IRA?

Reply: Honestly, I do not know. Can you give me any advice that would help in determining whether it is and how to handle it.? 

Here is some information:
On January 17, 2020, the IRA was transferred from SunTrust Bank to Nationwide.  My father was working very hard and was adamant about getting the IRA transferred by 12/31/2019.  However, he was unsuccessful in meeting that date.  It was 17 days after that, before it was transferred.  Since he has passed away, I cannot figure out why he wanted to get the IRA transfer competed by 12/31/2019.  I call on your many years dealing in this Discipline for help.  I know you do not have a crystal ball, but I would appreciate your educated guess. 

Here is some information from Nationwide:  They are stating it as a "Traditional IRA" and "we want to notify you the asset rollover requested is effective as of January 17, 2020."  The Fund Name: Nationwide Fix Account, Contribution Type: Rollover (Pre-Tax), Plan IRS Code: 457.

 

One of my concerns, is should SunTrust Bank provide a 1099-R, if we did not cash- out or receive any monies from the IRA?  Should the IRA be listed on 2019 Form 1040 Tax Return?.  The IRA was with SunTrust during the entire year of 2019.

Here is information, from the last Bank Statement ending 12/31/2019, that may be of help:

Balance as of 12/31/2019: $39,053.26

2018 Contributions: $6,500.00

2019 Contributions: $0.00

Non-Reportable Transfers: $0.00

Reportable Rollovers: $0.00

Interest Pay YTD: $18.76

Withdrawals/Distributions: $0.00

Balance 12/31/2019: $39,053.26

Federal Tax Withheld YTD: $0.00

Penalties Paid YTD: $0.00

State Withheld YTD: $0.00

Fair Market Value: $39, 053.26

 

Champ macuser_22, any help you can give me is greatly appreciated.  If you need anything else, please let me know.

 

Respectfully yours,

Al

macuser_22
Level 15

IRA Contribution

"A $6,500 contribution was made in 2019 for 2018."

 

A contribution in 2019 *for* 2018 must be reported on the 2018 tax return, not 2019 either as a deductible contribution or a non-dedictible contribution reported on a 8606 form.

 

"In Jan-2020, the IRA was transferred from SunTrust Bank to Nationwide."

 

A transfer form one trustee to another trustee when the money is not sent to the account owner does not require  a 1099-R, but some trustees send one anyway.      If not 1099-R was issued then there is noting to report on the 2019 tax return.

 

"in case Nationwide puts two-and-two together and figured out the account owner is. "

Nationwide should be notified of the death immediately so that they will treat the IRA as inherited by the named beneficiaries or your fathers estate if there was no named benificuary(s).

 

The moment that he died, the IRA was no longer his, but belongs to the benificuary(s).

**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.**

View solution in original post

macuser_22
Level 15

IRA Contribution

I also suggest that you read IRS Pub 559 (Survivors, Executors, and Administrators) for a lot of good information about filing the final return and estate return and other requirements.

https://www.irs.gov/pub/irs-pdf/p559.pdf

If he is married then his surviving spouse can file a joint return in the year of death.  If the spouse is the benificuary of the IRA then a spouse can choose to roll the inherited IRA into their own IRA.

**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.**

View solution in original post

macuser_22
Level 15

IRA Contribution

Also:

 

"Nationwide Fix Account, Contribution Type: Rollover (Pre-Tax), Plan IRS Code: 457."

 

I have no idea what that means.   You should ask Nationwide to decode it for you.   If by chance that are saying that the money was transfer (rolled over) from a 457 type retirement plan, then a 1099-R is required but not by Nationwide but from the 457 plan trustee.    If the transfer (rollover) was done in 2020 then the resulting 1099-R will not be issued until January of 2021 and would be reported on your fathers final 2020 tax return if he died in 2020.

**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.**

View solution in original post

jjf2008
Level 3

IRA Contribution

Dear CHAMP Level 15 macuser_22,

 

We must say that you are one smart cookie.  Thank you for sharing your knowledge of US Tax Laws and Procedures.  We will forever be in your debt, and can never repay you.  We would like to express our deep gratitude for your help in clearing up this matter.  With your good ideas, we finally know what to do.  Thank you very much for being so nice to us.

 

Truly your,

Al

 

 

PS: ..."2020 tax return if he died in 2020."

Yes, My father died February 13, 2020 in Florida.

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