Thursday, November 27, 2014
Inquirer Daily News

Woman's nephew says pension rollover isn't taxable

DEAR HARRY: Until about 15 years ago, my sister worked for a Philadelphia clothing-manufacturing company. When the company started to get the work done overseas, it closed the plant here, but continued in business. About a year later, the company filed for bankruptcy, and she was laid off.

The company had some kind of pension plan, and legal action was started by some employees to get the money in the plan distributed. This finally was settled in March, and she got a check accompanied by a 1099-R form dated in 2013.

She immediately took the check to her bank and opened an IRA for the full amount she received.

The 1099-R clearly indicated that the amount was taxable, but my son insists that it isn't. Help!

WHAT HARRY SAYS: Score one for your son!

Your sister rolled over the distribution to an IRA within the 60-day grace period. It's a good idea to send a copy of the 1099-R in with her 2013 return as well as the form from her bank confirming the rollover and the date and amount.

That 15-year delay is very intriguing. I never came across such a lengthy delay in getting things straightened out - even for large, complex bankruptcy situations. I'd appreciate any further info you can send me.

 


Email Harry Gross at harrygrossDN@gmail.com, or

write to him at Daily News, 801 Market St., Philadelphia, PA 19107.

Harry Gross Daily News Personal Finance Columnist
Business Videos:
Also on Philly.com:
Stay Connected