In article <XaDEk.1137$Dk4.607[at]nwrddc02.gnilink.net> ,
Phil Marti <prm20871[at]verizon.net> wrote:

- quote -

Maybe she bought something with the $12,000 that increased in value,
and she sold it for $25,000.

Seth

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Phil Marti wrote:
- quote -

I agree. there's something BAD wrong with this scenario. "prohibited
transactions" comes to mind

OP should consult a local tax pro in his area for help.

ChEAr$,
Harlan Lunsford, EA n LA
"Bud man, and Cub's fan!"

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<< ------------------------------------------------------- > << 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 (2007) - All rights reserved. > << ------------------------------------------------------- >

<bm30003700[at]aol.com> wrote:

- quote -

Assuming that the distribution is nonqualified, the issue is the amount of
the distribution, not the amount on the 1099-R. You can put any amount you
like in box 15a of the 1040 as long as you're prepared to prove it up to the
IRS when questioned. There must be guidelines for establishing the value of
untraded stock somewhere.

I wouldn't wast time pursuing an amended 1099-R. What foundation would the
custodian have for issuing one? Which raises the question, what foundation
did they have for the $25,000 number? It may or may not help, but I'm
curious about missing pieces of the story. You say that she's contributed
$12,000 to the Roth. So how did the Roth come up with $25,000 to buy the
stock?
--
Phil Marti
Clarksburg, MD

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<< ------------------------------------------------------- > << 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 (2007) - All rights reserved. > << ------------------------------------------------------- >

<bm30003700[at]aol.com> wrote in message
news:51686dd0-be67-4f21-a836-0bea02645667[at]f63g2000hsf.googlegroups.com...
- quote -

If this is a ROTH IRA, why is any of it taxable? Was the account NOT open
for 5+ years?

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<< ------------------------------------------------------- > << 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 (2007) - All rights reserved. > << ------------------------------------------------------- >

My client received a distribution of stock from the former custodian
of her Roth IRA when her account with that custodian was closed, and
continues to hold the stock.

My client paid $2.50 for 10,000 shares of the stock. The shares were
never publicly traded. At the time the
former custodian distributed the shares, my client says they were
worth $.23 to $.24 per share, and has an
from a broker (not the custodian) that values them at that price.

The custodian issued a 1099R for $25,000 for the distribution. Her
Roth IRA basis is about $12,000, so some of the distribution will be
taxable if the $25,000 is reported on the 2007 1040. Is a corrected
1099R warranted? If
so, what to do if the client can't get the amended 1099R by October
15?

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<< ------------------------------------------------------- > << 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 (2007) - All rights reserved. > << ------------------------------------------------------- >