ira distibution

2 replies
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we put a sale order on 1/31/2025, with the understanding it would count for 2025, we did this through vanguard, we paid estimated taxes on this. The transaction was completed in 2026, can we still claim the income in 2025 tax year?

NCperson

Level 15

your post is a little confusing.

Sell orders wthin an IRA have no tax consequences. Further did you place that request on 1/31/25 or 1/31/26?

if you meant you requested a DISTRIBUTION on 1.31/26, then you were misinformed as that is a 2026 transaction,

While 2025 CONTRIBUTIONS can occur through 4.15.26, 2025 DISTRIBUTIONS must occur no later than 12.31.25.

dmertz

Level 15

Or did you mean that you put the order in on 12/31/2025? It seems highly unlikely that a distribution request would go unprocessed for 11 months or more.

If the distribution from the IRA did not occur in 2025 and they sent you no 2025 Form 1099-R reporting this distribution, it's 2026 income, not 2025 income, and it goes on your 2026 tax return when you receive the 2026 Form 1099-R near then end of January 2027.

Assuming that it's 2026 income, your 2025 tax return will likely show a significant tax refund. On your 2025 tax return you can indicate that your refund be applied to your 2026 taxes. Doing so will cause the amount applied to be treated as a Q1 estimated tax payment.