Hi,
I made a $7500 contribution to my Traditional IRA on April 10, 2024 after having already filed my 2023 returns before April 10. Then, I realized that instead of filing 8606 to manage my basis for this contribution, I would rather return the excess back to my taxable account from where I had contributed the funds. On May 3, 2024 Fidelity processed the return of excess and I incurred a loss of $189 in the process.
I was informed by Fidelity that I need to file 1040X amended return for 2023 to include the gains/loss. I see a 5329 form in TurboTax Desktop Premier, but I can't enter the amounts in that form directly in Part III. Is that the right place to do so? Since I won't get 1099-R form until Q1 2025, and I need to file 1040X prior to Oct deadline, I was looking for help on how to enter the return of excess amount with gain/loss. Please advise.
If you had positive earnings on that contribution, you would have to report that.
You had negative earnings, which are ignored.
The letter and Form 5498 are for your records
It's not clear what your tax return says.
If you e-Filed without mentioning your IRA in any way, there is nothing to do.
You do not have to amend.
The custodian was wrong.
If you did file Form 8606 in anticipation, you have to amend to zero out the entries on that form
You don't need to mention the fact that you lost money.
Thank you for your reply.
Yes, when I filed my 2023 return there was no mention of the IRA contribution since I contributed this 2023 contribution of $7500 after filing my return.
The custodian has provided a form 5498 for the IRA contribution and also a letter about the return of excess showing the amount contributed and the amount returned. So, just to confirm, I don't have to file any form now or in 2025 (when the custodian will provide a 1099-R)?
If you had positive earnings on that contribution, you would have to report that.
You had negative earnings, which are ignored.
The letter and Form 5498 are for your records