Missed MRD and 1099-R

[Guest Pensions in Paradise]

We took over the administration of a plan in March and discovered that a participant was not paid their MRD for 2002. (The participant is 75 and retired in 1995, so the MRD is required.) We just paid the 2002 MRD and will be submitting to the IRS under VCP to obtain a waiver of the 4974 excise tax.

Would the distribution be taxable to the participant in 2002 or 2003? If it is taxable to the participant in 2002, do we issue a late 1099-R for 2002, even though the distribution was made in 2003?

Any assistance would be greatly appreciated.

[Guest SueJ]

I had this same question last month and went directly to the IRS.....here is there e-mailed response to me:

02/19/2003 03:57 Subject: IRS Email Tax Law Assistance

PM

NOTE: Our response to your tax law question appears below. If you have a

follow-up question or another general tax law question, please return to

our web site at: (http://www.irs.gov/help/page/0,,id=13162,00.html) to

submit it. Please do not use your "reply" button to respond to this

message. More helpful information is provided at the end of this message.

Your Question Was:

A 2002 required minimum distribution check is only being issued today. I

know the Form 5329 gets filed for the tax year 2002. Should the Form 1099

also reflect 2002 or should it reflect 2003?

The Answer To Your Question Is:

Since you did not receive your required minimum distribution for 2002 until

2003, both your 2002 and your 2003 distributions will be taxable on your

2003 tax return. You should receive a Form 1099 for 2003. Publication 590

(IRAs) page 30 have some information that you can download that should be

of interest to you.

IRS forms and publications may be accessed on our web site at the following

address: http://www.irs.gov/forms_pubs/index.html or ordered through our

toll-free forms line at:

800-829-3676

which is available 24 hours a day, 7 days a week, with 7-10 days delivery

time.

Other useful toll-free numbers include:

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EMPLOYEE ID: 38-01218 Mr. Patterson Tel.:(800)829-1040 msg#:

1315310

[Guest Pensions in Paradise]

SueJ, thank you so much replying to my question. I couldn't have asked for a better response.

[KJohnson]

I AGREE WITH THE PRIOR POST. HERE IS SOME ADDITIONAL CONFIRMATION:

http://benefitslink.com/cgi/qa.cgi?databas...a_distributions