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Traditional IRA contribution, withdrawn before tax return due date

Lori Friedman

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Taxpayer made a $5,500 IRA contribution for 2016 but withdrew the funds, along with the related investment earnings, before the Form 1040 due date (extended).  So far, so good.  The $5,500 has no tax consequences, but the earnings are taxable in 2016. 


I can't find any guidance about the mechanics.  IRS Publication 590-A has some nice language about the general tax treatment, but it doesn't say where/how to report the numbers.


--  I'm guessing the earnings get reported on Form 1040, Line 15b as a taxable IRA distribution?


-- Taxpayer is under age 59-1/2.  Are the earnings subject to the 10% penalty for an early withdrawal?  (We're talking about 10% of $30, so this isn't material whether "yes" or "no."  I'd like to get things right, though.)


--  I don't believe the IRA custodian will issue a 2016 Form 1099-R?  The money was withdrawn during 2017; as far as the custodian's concerned, isn't this a 2017 distribution?

Lori Friedman

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