Don Priebe wrote:
- quote -

The isn't so much about box 2a, as it is about box 1.

Does this involve a (former) employer? If so, it sounds like the issuer
may not have precisely followed the instructions.

The IRS instructions for 2007 Form 1099-R have several lengthy
paragraphs relating to distributions of "Employer securities and other
property", see also the note under "Losses" on page R-8.


[...]
- quote -

I'm curious as to the preferred use of Form 8275 vs. a simple statement
attached to the return. What about a substitute Form 1099-R as a way of
showing and explaining "your version" of the situation?

-Mark Bole

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bm30003700[at]aol.com wrote:
- quote -

stock in a private company. The company has fallen on hard times
and your client has taken a distribution of the stock from the IRA.

The issue here is no different then valuing private stock in an
estate. All of the following affect the price: No ready market
for the shares; very few buyers competing for the shares; and a
less than majority ownership. All of this requires an appraisal
from a business evaluation expert using industry acceptable
standards and who is familiar and has experience with discount
attributable to loss of marketability.

It is possible that in this case, discount is not an issue as the
company has no or very little value. If one can obtain the
company's financial statements so that one could at least value
the company, one could come up with the book value of the stock
before any discount. If that is close to zero, discount may not
be an issue.

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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. > << ------------------------------------------------------- >

- quote -

This in itself is very common. The custodian in general has no knowledge as
to how much of the distribution is taxable -- it depends on the amount of
non-deductible contributions that were made and/or distributed from all the
conventional IRA accounts you ever had, and on the value of those accounts
at the end of the previous year. See Form 8606.

- quote -

In the case of an investment for which market data is not available,
valuation at cost is not unreasonible.

- quote -

If you use a number other than that shown in the taxable box of the 1099-R
(like zero if the client has evidence that it really has no value), I'd
attach a Form 8275 to disclose the position and rationale you are taking.

[Dissenting views appreciated.]

- quote -

I'm shocked!
--
Don EA in Upstate NY

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

In article <881d1707-e4ce-4415-9604-26c9758b4c60[at]a26g2000prf.googlegroups.com> ,
bm30003700[at]aol.com <bm30003700[at]aol.com> wrote:
- quote -


In my opinion, every IRA custodian should check the cannot be
determined box. This is because the IRA custodian has absolutely
no idea if the taxpayer ever filed a form 8606 for nondeductible
contributions.


The taxpayer, therefore, is always reponsible for proving the
taxable amount.


Here I am suspicious how the custodian got one amount and the taxpayer
is claiming a very different valuation. But burden of proof is
on the taxpayer, and with a number much different from the
1099-R, chances are the IRS will ask for proof.
--


ArtKamlet at a o l dot c o m Columbus OH K2PZH

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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 recieved a 1099-R for a distribution of stock from an IRA
account. The amount shown on the 1099-R for taxable portion is the
same as the amount shown for total distribution. The box "taxable
portion not determined" is also marked with an "X" on the 1099-R.

The 1099-R shows a total disttribution amount which corresponds to the
amount my client paid for the
stock, although the actual value of the stock now, and at the time of
distribution, is negligible (never was a publicly traded stock, but
client has evidence that it has no value).

Can we file the return simply showing a taxable amount on line 15b
that is less than the amount shown
on line 15a, since the "taxable amount not determined" box is checked
on the 1099-R, or should some further information be provided with the
return, since the 1099-R box also shows taxable portion of the
distribution to be the same as total distribution?

Having the custodian file a corrected 1099-R doesn't seem to be an
option; no cooperation from the custodian.

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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. > << ------------------------------------------------------- >