Welcome back! Ask questions, get answers, and join our large community of tax professionals.
cancel
Showing results for 
Search instead for 
Did you mean: 

Client withdrew 26,000 from a traditional IRA for first time home buyer purchased , distribution code says 1 on the 1099-R, in order to avoid the penalty it should be J. Is it that to avoid the penalty the distribution needed to be from a Roth IRA ?

Highlighted
Level 2
 
Labels (1)
0 Cheers
1 Solution

Accepted Solutions
Highlighted
Level 15
Level 15

Im using Professional, not Basic, so Im not sure how different our screens are....but this is what my 5329 looks like.  I just enter the dollar amount into the smart worksheet and it inserts the code 9 automatically

fthb5329.png


♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

View solution in original post

4 Replies 4
Highlighted
Level 15
Level 15

Re: Client withdrew 26,000 from a traditional IRA for first time home buyer purchased , distribution code says 1 on the 1099-R, in order to avoid the penalty it should be J. Is it that to avoid the penalty the distribution needed to be from a Roth IRA ?

 

No, Code 1 is probably correct for a traditional IRA if hes under 59½ years old.

The 26K is still taxable income, its just the penalty on 10K of it that you can get waived.  The penalty waiver is done on Form 5329.


♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
Highlighted
Level 2

Thank you Lisa! I have been trying to enter the exception number "9" on form 5329 but is not letting me  ..... am I missing something that I need to do on the 1099-R so that the number "9" flows to form 5329?  

0 Cheers
Highlighted
Level 12

You don't "do" anything "on" the 1099-R. It is code 1. Not J or 9, there.

I found these resources for you:

https://proconnect.intuit.com/community/help-articles/help/proseries-form-1099-r-faq-s/00/4853

https://proconnect.intuit.com/community/proseries-discussions/discussion/1040-form-5329-entering-exc...

https://proconnect.intuit.com/community/proseries-discussions/discussion/1099-r/00/62065

 

*******************************
"Level Up" is a gaming function, not a real life function.
Highlighted
Level 15
Level 15

Im using Professional, not Basic, so Im not sure how different our screens are....but this is what my 5329 looks like.  I just enter the dollar amount into the smart worksheet and it inserts the code 9 automatically

fthb5329.png


♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

View solution in original post