Herb Smith <smithff33[at]aol.com> wrote:
- quote -

I think I am reading into OPs question the receipt of a
1099-R which is somewhat intimidating to someone who might
never have seen one before, with a notation of a
distribution, possible a Taxable Amount Not Determined check
even??

If so, then gross distribution might need to go on the tax
return, even though taxable amount is zero.

In my experience, many tax forms are truly intimidating. If
it's not a W-2 or a 1099-INT or something TP is familiar
with, the panic light goes off.

__
Art Kamlet ArtKamlet [at] AOL.com Columbus OH K2PZH

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- quote -

Why? You got the excess out before your extended due date,
so there's no penalty due, and Roth contributions aren't
reported anywhere on your return (unless you took a
retirement contribution credit). I don't see the need to do
anything.

Phil Marti
Topeka, KS

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"Jason Robertson" <jason6869[at]msn.com> wrote:

- quote -

Why do you think you need to "amend" anything? I assume you
removed the excess contribution prior to Oct 15, 2003. By
doing so, it is as if it never happened. Roth IRA
contributions are not shown on your tax return, in the first
place, and removal of an excess contribution is not a
"distribution".

- quote -

What you did by removing the excess contribution in a timely
manner is NOT a distribution. Forms 8606 and 5329 do not
come into play.

- quote -

A "blank" was correct on the original 1040. You did not take
a distribution, merely removed an excess contribution.

- quote -

Don't you understand the phrase "as if it had never
happened"? You don't have to report a "non-event".

- quote -

Amending Line 15a and or 15b was not necessary, as there
were NO earnings to report.

- quote -

Form 5329 was not necessary, in the first place. There is no
penalty for timely removal of the excess contribution and,
since there were no earnings, no penalty to report on them.

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I have recently had to amend my 2002 tax return due to Roth
IRA excess contribution removal. Could you tell me if what I
wrote to the IRS in the explanation letter below (attached
to 1040X) is correct, and if it makes sense. I haven't sent
it yet, so I can still make corrections.

The big point of concern is whether or not I need to pay 10%
additional tax on distribution. I am below 59 1/2 years of
age. The IRS instructions to forms 8606 and 5329 are not
very clear about it.

I will be very grateful for your comments.

-- Jason.

Here is what I wrote and attached to 1040X form:

"Form 1040 2002, Line 15a (IRA distributions) was changed
from a blank to a number: 1586.36

A 2002 Roth IRA contribution of $1766 had been removed on
9/17/2003, before the 2002 individual tax return 2nd
extension deadline on 10/15/2003, therefore it is considered
as it had never been contributed.

The removed amount $1586.36 was determined by the Roth IRA
custodian to include earnings/losses. Loss in this case.

There were no earnings on the removed contribution amount,
therefore no amount is included in line 15b Form 1040 as
taxable income.

Form 5329 does not need to be amended, as it was filed
correctly in anticipation of the timely Roth IRA
contribution removal."

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