OT : Rollover pension plan

[RUschool]

I recently decided to take a lump sum distribution of one of my pension plan which was rolled over into a Merrill Lynch IRA rollover account. I just received a 1099 form that show the amount distributed but under 2a no taxable amount was indicated since it was rolled over.

Do I have to even report this transaction on my income tax return? There probably is a form for this transaction but I would assume that I won't get in trouble if I didn't fill out the form since there is no taxable income.

 

[pmvon]

Ask turbotax

 

[rutgersal_rivals139582]

I recently decided to take a lump sum distribution of one of my pension plan which was rolled over into a Merrill Lynch IRA rollover account. I just received a 1099 form that show the amount distributed but under 2a no taxable amount was indicated since it was rolled over.

Do I have to even report this transaction on my income tax return? There probably is a form for this transaction but I would assume that I won't get in trouble if I didn't fill out the form since there is no taxable income.

what I previously posted was incorrect. The amount does get reported but it doesn't impact the taxes. Mea culpa. Thx to others for setting me right.

 

[Jtung230]

You didn't take a lump sum distribution. You rolled you pension into an IRA. Big difference and the smarter move of the two.

 

[PSU_Nut_rivals17625]

I recently decided to take a lump sum distribution of one of my pension plan which was rolled over into a Merrill Lynch IRA rollover account. I just received a 1099 form that show the amount distributed but under 2a no taxable amount was indicated since it was rolled over.

Do I have to even report this transaction on my income tax return? There probably is a form for this transaction but I would assume that I won't get in trouble if I didn't fill out the form since there is no taxable income.

If you are using a tax software I would go ahead and add it to the your return. It will not effect your tax liability.

 

[Ruthinking]

Yes, you need to report the distribution (so it matches up with what was sent to the IRS) but then you also report that the same amount was rolled over.(there's a line for that) So the net result is that it's not a taxable event but in order to avoid any IRS questions it needs to be reported.

 

[RU Golfer]

http://www.bankrate.com/finance/money-guides/reporting-ira-rollovers-1.aspx

 

[zubz]

YES! It is reportable and not taxable. Merrill will generate a 5498 which is the offsetting form showed that you did indeed roll it over.

You are also allowed to do a transfer to another IRA if you wanted to get it away from Merrill.

 

[RUsundevil]

Did you do an indirect rollover or direct transfer?

I recently decided to take a lump sum distribution of one of my pension plan which was rolled over into a Merrill Lynch IRA rollover account. I just received a 1099 form that show the amount distributed but under 2a no taxable amount was indicated since it was rolled over.

Do I have to even report this transaction on my income tax return? There probably is a form for this transaction but I would assume that I won't get in trouble if I didn't fill out the form since there is no taxable income.

 

[jakeknight]

Zubz Nailed it, the receiving entity ML should provide a 5498 that should be filed with your return (validates that it was a proper rollover) Usually on a rollover the sending entity makes the check out to the receiving entity "for the benefit of" (your name) this provides the proper trail should you ever have an audit.

 

[taudelt73]

On the 1099-R in Box 7 there should be a code "G" which means you rolled the distribution over if you did a trustee to trustee rollover. This code will tell the IRS that this is a rollover and not taxable. You need to report the distribution on line 16a but 0 on line 16b (taxable amount). Not familiar with many of the commercial tax softwares available but guessing if you go to the 1099-R input form on the software and put the information in exactly as stated on the 1099-R, it should be handled correctly.