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Proseries 1040 sale of stock

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Level 2

I have a client that sold the stock they held in their retirement plan, they were issued a 1099b.  Then they retired and rolled the entire plan over to their Financial Advisor.  They received the 1099b showing the entire sales price, then received a 1099r for the same amount.  How do I enter the 1099b information so it is not taxable?

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Level 15

Stock sales in a qualified retirement plan are not subject to 1099-B reporting. If that's what happened, client needs to get the 1099-B corrected to -0-.

 

Are you sure you are looking at the 1099-B correctly? Maybe it is for personal holdings. Maybe a nonqualified deferred comp plan.

 


ex-AllStar

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Level 15

Stock sales in a qualified retirement plan are not subject to 1099-B reporting. If that's what happened, client needs to get the 1099-B corrected to -0-.

 

Are you sure you are looking at the 1099-B correctly? Maybe it is for personal holdings. Maybe a nonqualified deferred comp plan.

 


ex-AllStar

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Level 12

I think you need some clarity from that client on "retirement Plan" and "retirement Account." These are not synonyms.

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Level 2

Thank you for your help.  It doesn't seem like client understands what has happened.

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Level 12

A 1099-B is not issued from an Account that is part of a Qualified tax deferred plan, which includes but is not limited to Traditional IRA, 401(k), etc. It also is not issued from an account held as retirement that is tax exempt, such as Roth IRA and Roth 401(k). That's because these are Trustee accounts, held on behalf of your client.

If that form was issued at all, it would be to the recipient as the Trustee name; not to your client's name. As a fiduciary account, it isn't issued.

And it would not be issued again, because a Sale only happens once. So, the second 1099-B might be a different Lot sale.

You should be able to get statements to confirm these holdings, the date of purchase and sale, and the 1099-B shows the holdings sold. There also should be Details attached to the 1099-B. If it really is the same sale info, that makes it Duplicate, obviously, and the Financial Advisor has made the error.

Or, what actually happened is the holdings could not transfer in kind, but the Financial Manager promised them it would be the same holdings. So, you have a Sale from the first account, a Buy in the new account, and then a Sale in the new account. This also should be obvious from looking at their paperwork.

And it might not be a "roll" at all. Just because things move around doesn't make it a Rollover. That terminology doesn't apply to non-qualified accounts, retirement or not.

 

Get their statements and look at the Name. Trustee accounts are titled that way. "FBO" for instance = For Benefit Of. The holder account info might include that this is Wells Fargo Trustee or Custodian, then your client's name with "IRA" after their name. If you don't see this sort of info, it is a regular brokerage investment account that they intended to use for retirement purposes.

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