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I have a 1099-r with early distribution of annuity issued to a simple trust. Where do I calculate penalty?

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Level 1
last updated ‎April 09, 2020 3:08 PM
 
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Level 14
last updated ‎April 09, 2020 3:08 PM

I was about to tell you to enter the distribution code 1 and Lacerte would calculate it but I see that is not working. Looks like you can enter the 10% tax in Screen 42 Other Taxes as "From Form 5329" and manually prepare and attach Form 5329. I'm guessing this will be a paper return since 5329 is not listed in efile attachments list..


ex-AllStar
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Level 14
last updated ‎April 09, 2020 3:08 PM

Oops. Just realized you said simple trust. So all income is distributed and the beneficiary(ies) have to pay tax plus penalty. I guess you need to disclose in a statement on their K-1 that the amount on Line 5 (or the applicable amount) is subject to the 10% penalty on premature withdrawals.

My first answer would work for a complex trust or estate with no distributions.


ex-AllStar