Saturday, July 26, 2014
Inquirer Daily News

IRA-distribution checkmate?

DEAR HARRY: My 79-year-old mother-in-law recently discovered that her IRA distribution check for 2010 was in a kitchen cabinet uncashed. She has a Form 1099 for 2010, and the full $1,100 was reported on her 2010 tax return. She contacted the broker who is the custodian, and was told that they returned the amount to her account after six months. She withdrew the $1,100 from the account in December. She already had withdrawn her required minimum distribution for 2013 earlier in the year. So far, she has not received her 1099 for 2013. How do we handle this to prevent it from being taxed again in 2013?

WHAT HARRY SAYS: Immediately notify the broker that this amount should not be reported a second time. If it's too late to get a correct 1099, ask for an amended one showing only the current distribution. If they cannot or will not do this, you will have to attach a note to the return explaining what happened. A copy of her 1099s for 2010 and 2013 would be helpful. So would a letter from the broker explaining what they did. I'm a bit surprised at the way they handled this. A better procedure would have been to contact her long before this.

 


Email Harry Gross at harrygrossDN@gmail.com, or

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

 

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Harry Gross Daily News Personal Finance Columnist
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