1099R coded as premature, however it was not.

[Guest Michael Anderson]

We have a participant that rolled her IRA into a qualified 401(k) account. The investment company who held the IRA said that they do not code their IRA's as conduit and therefore use the premature distribution code 1 on all 1099R's. This obviously was not a premature distribution. Does anyone have advice on how to inform the IRS that it was not taken in cash and was not premature?? Thank You!

[Guest Mbrockway]

Issue a corrected 1099-R.

[Guest Michael Anderson]

That is what I was going to do initially, however when I spoke to the investment company, they told me specifically that I could not issue a corrected 1099, because 'we coded it correctly due to the fact that it was not marked as a conduit IRA" Which is why I am asking the question.....it seems that we should still be able to issue the corrected 1099 because we KNOW that this was not premature. They were telling me that the participant needed to get statements and other information together to prove to the IRS that this was not a premature distribution - which seems crazy to me!

[Harwood]

Line 2 of Form 5329 is used to report an incorrect 1099-R coding

http://www.irs.ustreas.gov/pub/irs-pdf/i5329.pdf

http://www.irs.ustreas.gov/pub/irs-pdf/f5329.pdf

[Guest Michael Anderson]

Harwood - Thank you for the links - this looks like it will work great - I appreciate your time. Mike