Questions about Excess Contributions and Form 5329

[neutron450]

@dmertz 

Okay so just to be sure I understand, invoking section 301.9100-2 would only be done if someone removed 2024 excess contributions after April 15th and before October 15th?

Sorry to be so needy. This is quite a complex puzzle. Again grateful for your input!

[dmertz]

Correct.  In this case the distribution was made before the 6-month extension period, not during the 6-month extension period.

See section 301.9100-2(b):  https://www.law.cornell.edu/cfr/text/26/301.9100-2

[fanfare]

"We are talking here about distributions made in March of 2025, before the due date of the 2024 tax return, "

doing so voids the penalty on an excess 2024 contribution and make the allocable earned income taxable instead.

@dmertz 

[neutron450]

@dmertz 

Thanks for that link.

I'm a bit puzzled by Part (e) Example 2. 

It seems to imply that if you filed your return before April 15th, then the date you filed is considered to be the "due date." 

What's your take on this?

[dmertz]

March 16, 1998 in that example was the due date for a corporation using a calendar tax year to file its 1997 tax return.

Yes, your individual 2024 the tax return is considered to have been filed on April 15, 2025 if you filed before that date.  That's why the automatic extension under section 301.9100-2 takes you to October 15, 2025 to make a statutory election.  In your case, you already made the statutory election and obtained the return of contribution in March of 2025, so no 6-month extension is needed to obtain the distribution, no need for section 301.9100-2.