ybotkaSPM[at]cinci.rr.com (tobe) posted:

- quote -

Had you withdrawn that $7 at the same time during calendar
year 2006, there would be no issue.

- quote -

The $7 is an amount which is generally considered "de
minimis" (Hope that Latin is correct) -- or too
insignificant to worry about. But you could reasonably
comply with the spirit of the requirement by noting the $7
under "other income" on line 21, noting it was "interest
earned by a mistaken deposit to your Roth IRA, which was
corrected."

Or you could just include it as "interest" and describe it
similarly (as briefly as possible) when you enter it on
Schedule B.

I would avoid a separate explanatory note, when just a few
words can define it.

Bill

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

tobe <ybotka...[at]cinci.rr.com> wrote:

- quote -

I think you are confused. First, you should be using Pub.
590, not 525. On page 62 there is a worksheet to calculate
the taxable amount of the distribution, which you apparently
determined was $7. But the instructions for Line 16 of this
worksheet say "Enter the smaller of the amount [that is] on
line 7 or the amount [that is] on line 15 [of the
worksheet]. This is your taxable distribution." It doesn't
mean to enter that amount on line 7 of the 1040. You would
enter it either as interest or dividend income on your 1040,
depending on where it came from. There's no need to attach
an explanation.

Dennis

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

What was the source of the dividend check?

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

I am retired and had no wages, salary, or tips for 2006.
Through an error, a dividend check was deposited into an
existing Roth IRA. When this was discovered, I withdrew the
check as an excess contribution. There was about $7 of
income earned on the excess contribution while it was in the
Roth IRA.

IRS Pub 525 tells me to put that $7 on line 7 of Form 1040
(wages, salary, tips). However, I am retired and had no
earned income for 2006, so this makes no sense to me. It is
not as if it is income generated by an 'earned income'
excess contribution.

If I list 'income' on line 7 of Form 1040, I will have to
file a local tax return (taxed on earned income only), and I
am trying to avoid ANOTHER form to fill out.

Should I just include it as interest income,and include an
explanatory note with my return?

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >