Publication 590
taxmap/pubs/p590-011.htm#en_us_publink1000230799In general, distributions from a traditional IRA are taxable in the year you receive them.
taxmap/pubs/p590-011.htm#en_us_publink1000230800Distributions from a traditional IRA are taxable in the year you receive them even if they are made without your consent by a state agency as receiver of an insolvent savings institution. This means you must include such distributions in your gross income unless you roll them over. For an exception to the 1-year waiting period rule for rollovers of certain distributions from failed financial institutions, see
Exception under
Rollover From One IRA Into Another, earlier.
Exceptions to distributions from traditional IRAs being taxable in the year you receive them are:
 | Although a conversion of a traditional IRA is considered a rollover for Roth IRA purposes, it is not an exception to the rule that distributions from a traditional IRA are taxable in the year you receive them. Conversion distributions are includible in your gross income subject to this rule and the
special rules for conversions explained earlier and in chapter 2. |
taxmap/pubs/p590-011.htm#en_us_publink1000295917
A qualified charitable distribution (QCD) is generally a nontaxable distribution
made directly by the trustee of your IRA (other than a SEP or SIMPLE IRA) to an
organization eligible to receive tax-deductible contributions. You must be at
least age 701/2 when the distribution was made. Also, you must have the same
type of acknowledgement of your contribution that you would need to claim a
deduction for a charitable contribution. See
Records To Keep in Publication
526, Charitable Contributions.
The maximum annual exclusion for QCDs is $100,000. Any QCD in excess of the $100,000 exclusion limit is included in income as any other distribution. If you file a joint return, your spouse can also have a QCD and exclude up to $100,000. The amount of the QCD is limited to the amount of the distribution that would otherwise be included in income. If your IRA includes nondeductible contributions, the distribution is first considered to be paid out of otherwise taxable
income.
 | A QCD will count towards your required minimum distribution. Additionally, special rules apply if you made a qualified charitable distribution (QCD) in January 2013, or if you took a distribution in December 2012 and contributed any portion of it to a charity before February 1, 2013. See January 2013 QCDs and December 2012 distributions later for more
details. |
| You cannot claim a charitable contribution deduction for any QCD not included in your
income. |
taxmap/pubs/p590-011.htm#en_us_publink1000295922If you made a QCD in January 2013, you can elect to have it treated as made in 2012. If you make this election, the amount of the QCD can count towards any unmade 2012 required minimum distribution. However, no part of such a QCD can be used to satisfy the 2013 required minimum distribution. You must report the QCD on both your 2012 and 2013 tax returns as discussed
below.
taxmap/pubs/p590-011.htm#en_us_publink1000295923
You will not receive a 2012 Form 1099-R reporting a QCD you made in January 2013
that you are electing to treat as made in 2012. However, you must report the
full amount of the QCD on your 2012 Form 1040, line 15a; Form 1040A, line 11a;
or Form 1040NR, line 16a (even if it is in excess of the $100,000 QCD exclusion
limit). Do not include any of the QCD, including any amount of the QCD in excess
of the $100,000 exclusion limit on your 2012 Form 1040, line 15b; Form 1040A,
line 11b; or Form 1040NR, line 16b. Be sure to enter “QCD” next to
Form 1040, line 15b; Form 1040A, line 11b; or Form 1040NR, line 16b. You will
receive a 2013 Form 1099-R in 2014 reporting this QCD.
If you are required to file a 2012 Form 5329 because you failed to take your total required minimum distributions for the year, include the full amount of the January 2013 QCD on your 2012 Form 5329, line
51.
You may be required to file a 2012 Form 8606 if:
- You took a distribution from your traditional IRA in 2012 (other than the January 2013 QCD) in which you have basis. See
Nondeductible Contributions under
How Much Can You Deduct?
in chapter 1. Reduce your ending balance on your 2012 Form 8606, line 6, by the
full amount of the January 2013 QCD. Additionally, the January 2013 QCD is not
included in the amounts you report on your 2012 Form 8606, line 7.
- You took a nonqualified distribution from a Roth IRA. See
What Are Qualified Distributions? under
Are Distributions Taxable?
in chapter 2. The January 2013 QCD is not included in the amounts you report on
your 2012 Form 8606, line 19.
You will receive a 2013 Form 1099-R in 2014 reporting a January 2013 QCD. You
will have to include on your 2013 tax return the January 2013 QCD, so keep
records. See the 2013 Publication
590 for more information on reporting January QCDs in 2013.
On January 17, 2013, Brianna, age 75, directs the trustee of her IRA to make a distribution of $25,000 directly to a qualified 501(c)(3) organization (a charitable organization eligible to receive tax-deductible contributions). Brianna elects to have this QCD made for 2012. The total value of Brianna's IRA before the distribution was $245,000 and consists of deductible contributions and earnings. Brianna already satisfied her required minimum distribution requirement of $18,000 before this $25,000 QCD. This is Brianna's only IRA and there are no other distributions for 2012.
Brianna enters $43,000 on line 15a of her 2012 Form 1040. The $43,000 consists of the $18,000 required minimum distribution for 2012 and the $25,000 QCD made on January 17, 2013. Brianna enters $18,000 on line 15b of her 2012 form 1040. The $25,000 QCD made in January, 2013, for 2012 is not taxable. Brianna also enters "QCD" next to line 15b to indicate a qualified charitable distribution. Since Brianna will be receiving a 2013 Form 1099-R reporting the $25,000 distribution on January 17, 2013, Brianna will also need to report this on her 2013 Form 1040.
taxmap/pubs/p590-011.htm#en_us_publink1000295949If you took a distribution in December 2012 and contributed any portion of it to a charity before February 1, 2013, you may elect to treat it as a QCD for 2012 on your 2012 tax return. In addition to meeting the requirements stated earlier under
Qualified charitable distributions, you must also meet the following conditions to make such an election:
- The contribution to the charity must be cash or a cash equivalent such as a
check.
- The charity must be an organization that is eligible to receive tax-deductible
contributions.
- The contribution to the charity must be made after you received the distribution from the IRA. This includes charitable contributions made in December
2012.
If you make this election, the portion of the distribution contributed to the
charity will be considered a QCD and will count towards your 2012 required
minimum distribution. However, no part of such a QCD can be used to satisfy the
2013 required minimum distribution. You must report the QCD on your 2012 tax
return as discussed below.
You will receive a 2012 Form 1099-R in 2013 reporting this distribution. You
must report the full amount of the distribution on your 2012 Form 1040, line
15a; Form 1040A, line 11a; or Form 1040NR, line 16a (even if it is in excess of
the $100,000 QCD exclusion limit). Do not include any of the QCD (up to the
$100,000 exclusion limit) on your 2012 Form 1040, line 15b; Form 1040A, line
11b; or Form 1040NR, line 16b. Be sure to enter “QCD” next to Form
1040, line 15b; Form 1040A, line 11b; or Form 1040NR, line 16b.
If you are required to file a 2012 Form 5329 because you failed to take your total required minimum distributions for the year, include the full amount of the December 2012 distribution on your 2012 Form 5329, line
51.
You may be required to file a 2012 Form 8606 if:
- You took a distribution from your traditional IRA in 2012 (including the December 2012 distribution) in which you have basis. See
Nondeductible Contributions under
How Much Can You Deduct?
in chapter 1. Any portion of the December 2012 distribution that you contributed
to charity before February 1, 2013 is not included in the amounts you report on
your 2012 Form 8606, line 7. The value of your IRA(s) reported on your 2012 Form
8606, line 6, should already reflect the December 2012 distribution. See the
Caution below.
- You took a nonqualified distribution from a Roth IRA. See
What Are Qualified Distributions? under
Are Distributions Taxable?
in chapter 2. Any portion of the December 2012 distribution that you contributed
to charity before February 1, 2013 is not included in the amounts you report on
your 2012 Form 8606, line 19.
| The December 2012 distribution that you elect to treat as a QCD will not reduce the amount you enter on your 2012 Form 8606, line 6. This is due to the fact that the ending balance, as reported to you by your account's end of the year statement, takes into account the December 2012
distribution. |
taxmap/pubs/p590-011.htm#en_us_publink1000296839On December 17, 2012, Kristina, age 73, receives a $20,000 distribution from her only IRA to satisfy her 2012 required minimum distribution. There were no other distributions for 2012 from the IRA. The total value of Kristina's IRA before the distribution was $296,000 and consists of deductible contributions and earnings. On January 23, 2013, Kristina contributes $15,000 to her favorite charity which is a qualified 501(c)(3) organization (a charitable organization eligible to receive tax-deductible contributions). Kristina elects to treat this contribution as a QCD for
2012.
Kristina enters $20,000 on line 15a of her 2012 Form 1040. This amount represents the $20,000 distribution on December 17, 2012. Kristina enters $5,000 on line 15b of her 2012 Form 1040. The $15,000 QCD made in January, 2013, for 2012 is not taxable. Kristina also enters "QCD" next to line 15b to indicate a qualified charitable distribution.
taxmap/pubs/p590-011.htm#en_us_publink1000298185
You will not receive a 2013 Form 1099-R reporting this distribution. Therefore,
you will not have to include this transaction on your 2013 tax return.
taxmap/pubs/p590-011.htm#en_us_publink1000265781You may be able to make a qualified HSA funding distribution from your traditional IRA or Roth IRA to your Health Savings Account (HSA). You cannot make this distribution from an ongoing SEP IRA or SIMPLE IRA. For this purpose, a SEP IRA or SIMPLE IRA is ongoing if an employer contribution is made for the plan year ending with or within your tax year in which the distribution would be made. The distribution must be less than or equal to your maximum annual HSA
contribution.
This distribution must be made directly by the trustee of the IRA to the trustee of the HSA. The distribution is not included in your income, is not deductible, and reduces the amount that can be contributed to your HSA. You must make the distribution by the end of the year; the special rule allowing contributions to your HSA for the previous year if made by your tax return filing deadline does not apply. The qualified HSA funding distribution is reported on Form 8889, Health Savings Accounts, for the year in which the distribution is
made.
taxmap/pubs/p590-011.htm#en_us_publink1000265782Generally, only one qualified HSA funding distribution is allowed during your lifetime. If you own two or more IRAs, and want to use amounts in multiple IRAs to make a qualified HSA funding distribution, you must first make an IRA-to-IRA transfer of the amounts to be distributed into a single IRA, and then make the one-time qualified HSA funding distribution from that
IRA.
taxmap/pubs/p590-011.htm#en_us_publink1000265783If at any time during the testing period you cease to meet all requirements to be an eligible individual, the amount of the qualified HSA funding distribution is included in your gross income. The qualified HSA funding distribution is included in gross income in the taxable year you first fail to be an eligible individual. This amount is subject to the 10 percent additional tax (unless the failure is due to disability or
death).
taxmap/pubs/p590-011.htm#en_us_publink1000265784See Publication
969, Health Savings Accounts and Other Tax-Favored Health Plans, for additional information about this
distribution.
Distributions from traditional IRAs that you include in income are taxed as ordinary
income.
taxmap/pubs/p590-011.htm#en_us_publink1000266334In figuring your tax, you cannot use the 10-year tax option or capital gain treatment that applies to lump-sum distributions from qualified retirement
plans.
taxmap/pubs/p590-011.htm#en_us_publink1000230812Distributions from your traditional IRA may be fully or partly taxable, depending on whether your IRA includes any nondeductible contributions.
taxmap/pubs/p590-011.htm#en_us_publink1000230813If only deductible contributions were made to your traditional IRA (or IRAs, if you have more than one), you have no basis in your IRA. Because you have no basis in your IRA, any distributions are fully taxable when received. See
Reporting and Withholding Requirements for Taxable Amounts, later.
If you made nondeductible contributions or rolled over any after-tax amounts to any of your traditional IRAs, you have a cost basis (investment in the contract) equal to the amount of those contributions. These nondeductible contributions are not taxed when they are distributed to you. They are a return of your investment in your
IRA.
Only the part of the distribution that represents nondeductible contributions and rolled over after-tax amounts (your cost basis) is tax free. If nondeductible contributions have been made or after-tax amounts have been rolled over to your IRA, distributions consist partly of nondeductible contributions (basis) and partly of deductible contributions, earnings, and gains (if there are any). Until all of your basis has been distributed, each distribution is partly nontaxable and partly taxable.
taxmap/pubs/p590-011.htm#en_us_publink1000230816You must complete Form 8606, and attach it to your return, if you receive a distribution from a traditional IRA and have ever made nondeductible contributions or rolled over after-tax amounts to any of your traditional IRAs. Using the form, you will figure the nontaxable distributions for 2012, and your total IRA basis for 2012 and earlier years. See the illustrated Forms 8606 in this
chapter.
Note.If you are required to file Form 8606, but you are not required to file an income tax return, you still must file Form 8606. Complete Form 8606, sign it, and send it to the IRS at the time and place you would otherwise file an income tax return.
taxmap/pubs/p590-011.htm#en_us_publink1000230818If your traditional IRA includes nondeductible contributions and you received a distribution from it in 2012, you must use Form 8606 to figure how much of your 2012 IRA distribution is tax
free.
Note.When figuring the nontaxable and taxable amounts of distributions made prior to death in the year the IRA account owner dies, the value of all traditional (including SEP) and SIMPLE IRAs should be figured as of the date of death instead of December
31.
taxmap/pubs/p590-011.htm#en_us_publink1000230819If you received a distribution in 2012 from a traditional IRA and you also made contributions to a traditional IRA for 2012 that may not be fully deductible because of the income limits, you can use
Worksheet 1-5
to figure how much of your 2012 IRA distribution is tax free and how much is
taxable. Then you can figure the amount of nondeductible contributions to report
on Form 8606. Follow the instructions under
Reporting your nontaxable distribution on Form 8606,
next, to figure your remaining basis after the distribution.
To report your nontaxable distribution and to figure the remaining basis in your traditional IRA after distributions, you must complete
Worksheet 1-5
before completing Form 8606. Then follow these steps to complete Form 8606.
- Use
Worksheet 1-2
or the IRA Deduction Worksheet in the Form 1040, 1040A, or 1040NR instructions
to figure your deductible contributions to traditional IRAs to report on Form
1040, line 32; Form 1040A, line 17; or Form 1040NR, line 32.
- After you complete
Worksheet 1-2
or the IRA deduction worksheet in the form instructions, enter your
nondeductible contributions to traditional IRAs on line 1 of Form 8606.
- Complete lines 2 through 5 of Form 8606.
- If line 5 of Form 8606 is less than line 8 of
Worksheet 1-5, complete lines 6 through 15 of Form 8606 and stop here.
- If line 5 of Form 8606 is equal to or greater than line 8 of
Worksheet 1-5, follow instructions 6 and 7, next. Do not complete lines 6 through 12 of Form
8606.
- Enter the amount from line 8 of
Worksheet 1-5 on lines 13 and 17 of Form 8606.
- Complete line 14 of Form 8606.
- Enter the amount from line 9 of
Worksheet 1-5
(or, if you entered an amount on line 11, the amount from that line) on line 15
of Form 8606.
 | Worksheet 1-5. Figuring the Taxable Part of Your IRA Distribution
Use only if you made contributions to a traditional IRA for 2012 that may not be fully deductible and have to figure the taxable part of your 2012 distributions to determine your modified AGI. See
Limit if Covered by Employer Plan.
Form 8606 and the related instructions will be needed when using this
worksheet.
Note. When used in this worksheet, the term
outstanding rollover
refers to an amount distributed from a traditional IRA as part of a rollover
that, as of December 31, 2012, had not yet been reinvested in another
traditional IRA, but was still eligible to be rolled over tax free.
| 1. | Enter the basis in your traditional IRAs as of December 31, 2011
| 1. | | | 2. | Enter the total of all contributions made to your traditional IRAs during 2012 and all contributions made during 2013 that were for 2012,
whether or not deductible. Do not include rollover contributions properly rolled over into IRAs. Also, do not include certain returned contributions described in the instructions for line 7, Part I, of Form 8606.
| 2. |
| | 3. | Add lines 1 and 2 | 3. | | | 4. | Enter the value of all your traditional IRAs as of December 31, 2012 (include any outstanding rollovers from traditional IRAs to other traditional IRAs).
| 4. |
| | 5. | Enter the total distributions from traditional IRAs (including amounts converted to Roth IRAs that will be shown on line 16 of Form 8606) received in 2012. (Do not include outstanding rollovers included on line 4 or any rollovers between traditional IRAs completed by December 31, 2012. Also, do not include certain returned contributions described in the instructions for line 7, Part I, of Form 8606.)
| 5. | | | 6. | Add lines 4 and 5 | 6. | | | 7. | Divide line 3 by line 6. Enter the result as a decimal (rounded to at least three places).
If the result is 1.000 or more, enter 1.000
| 7. | | | 8. | Nontaxable portion of the distribution.
Multiply line 5 by line 7. Enter the result here and on lines 13 and 17 of Form 8606
| 8. | | | 9. | Taxable portion of the distribution (before adjustment for
conversions).
Subtract line 8 from line 5. Enter the result here and if there are no amounts converted to Roth IRAs,
stop here and enter the result on line 15 of Form 8606
| 9. | | | 10. | Enter the amount included on line 9 that is allocable to amounts converted to Roth IRAs by December 31, 2012. (See
Note
at the end of this worksheet.) Enter here and on line 18 of Form 8606
| 10. | | | 11. | Taxable portion of the distribution (after adjustments for conversions).
Subtract line 10 from line 9. Enter the result here and on line 15 of Form 8606
| 11. | | |
Note.
If the amount on line 5 of this worksheet includes an amount converted to a Roth IRA by December 31, 2012, you must determine the percentage of the distribution allocable to the conversion. To figure the percentage, divide the amount converted (from line 16 of Form 8606) by the total distributions shown on line 5. To figure the amounts to include on line 10 of this worksheet and on line 18, Part II of Form 8606, multiply line 9 of the worksheet by the percentage you figured.
|
|
taxmap/pubs/p590-011.htm#en_us_publink1000230821Rose Green has made the following contributions to her traditional IRAs.
| Year | Deductible | Nondeductible |
| 2005 | 2,000 | -0- |
| 2006 | 2,000 | -0- |
| 2007 | 2,000 | -0- |
| 2008 | 1,000 | -0- |
| 2009 | 1,000 | -0- |
| 2010 | 1,000 | -0- |
| 2011 | 700 | 300 |
| Totals | $9,700 | $300 |
Rose needs to complete Worksheet 1-5, Figuring the Taxable Part of Your IRA
Distribution, to determine if her IRA deduction for 2012 will be reduced or
eliminated. In 2012, she makes a $2,000 contribution that may be partly
nondeductible. She also receives a distribution of $5,000 for conversion to a
Roth IRA. She completed the conversion before December 31, 2012, and did not
recharacterize any contributions. At the end of 2012, the fair market values of
her accounts, including earnings, total $20,000. She did not receive any
tax-free distributions in earlier years. The amount she includes in income for
2012 is figured on
Worksheet 1-5, Figuring the Taxable Part of Your IRA
Distribution—Illustrated.
Worksheet 1-5. Figuring the Taxable Part of Your IRA
Distribution—Illustrated Use only if you made contributions to a traditional IRA for 2012 that may not be fully deductible and have to figure the taxable part of your 2012 distributions to determine your modified AGI. See
Limit if Covered by Employer Plan.
Form 8606 and the related instructions will be needed when using this worksheet.
Note. When used in this worksheet, the term
outstanding rollover
refers to an amount distributed from a traditional IRA as part of a rollover that, as of December 31, 2012, had not yet been reinvested in another traditional IRA, but was still eligible to be rolled over tax free.
| 1. | Enter the basis in your traditional IRAs as of December 31, 2011
| 1. | 300 | | 2. | Enter the total of all contributions made to your traditional IRAs during 2012 and all contributions made during 2013 that were for 2012,
whether or not deductible. Do not include rollover contributions properly rolled over into IRAs. Also, do not include certain returned contributions described in the instructions for line 7, Part I, of Form 8606.
| 2. | 2,000 | | 3. | Add lines 1 and 2 | 3. | 2,300 | | 4. | Enter the value of all your traditional IRAs as of December 31, 2012 (include any outstanding rollovers from traditional IRAs to other traditional IRAs)
| 4. | 20,000 | | 5. | Enter the total distributions from traditional IRAs (including amounts converted to Roth IRAs that will be shown on line 16 of Form 8606) received in 2012. (Do not include outstanding rollovers included on line 4 or any rollovers between traditional IRAs completed by December 31, 2012. Also, do not include certain returned contributions described in the instructions for line 7, Part I, of Form 8606.)
| 5. | 5,000 | | 6. | Add lines 4 and 5 | 6. | 25,000 | | 7. | Divide line 3 by line 6. Enter the result as a decimal (rounded to at least three
places).
If the result is 1.000 or more, enter 1.000
| 7. | .092 | | 8. | Nontaxable portion of the distribution.
Multiply line 5 by line 7. Enter the result here and on lines 13 and 17 of Form 8606
| 8. | 460 | | 9. | Taxable portion of the distribution (before adjustment for
conversions).
Subtract line 8 from line 5. Enter the result here and if there are no amounts converted to Roth IRAs,
stop here
and enter the result on line 15 of Form 8606
| 9. | 4,540 | | 10. | Enter the amount included on line 9 that is allocable to amounts converted to Roth IRAs by December 31, 2012. (See
Note
at the end of this worksheet.) Enter here and on line 18 of Form 8606
| 10. | 4,540 | | 11. | Taxable portion of the distribution (after adjustments for conversions).
Subtract line 10 from line 9. Enter the result here and on line 15 of Form 8606
| 11. | 0 | | Note.
If the amount on line 5 of this worksheet includes an amount converted to a Roth
IRA by December 31, 2012, you must determine the percentage of the distribution
allocable to the conversion. To figure the percentage, divide the amount
converted (from line 16 of Form 8606) by the total distributions shown on line
5. To figure the amounts to include on line 10 of this worksheet and on line 18,
Part II of Form 8606, multiply line 9 of the worksheet by the percentage you
figured.
|
|
taxmap/pubs/p590-011.htm#en_us_publink1000230823If you have a loss on your traditional IRA investment, you can recognize (include) the loss on your income tax return, but only when all the amounts in all your traditional IRA accounts have been distributed to you and the total distributions are less than your unrecovered basis, if any.
Your basis is the total amount of the nondeductible contributions in your traditional
IRAs.
You claim the loss as a miscellaneous itemized deduction, subject to the 2%-of-adjusted-gross-income limit that applies to certain miscellaneous itemized deductions on Schedule A (Form 1040). Any such losses are added back to taxable income for purposes of calculating the alternative minimum
tax.
taxmap/pubs/p590-011.htm#en_us_publink1000230824Bill King has made nondeductible contributions to a traditional IRA totaling $2,000, giving him a basis at the end of 2011 of $2,000. By the end of 2012, his IRA earns $400 in interest income. In that year, Bill receives a distribution of $600 ($500 basis + $100 interest), reducing the value of his IRA to $1,800 ($2,000 + $400 − $600) at year's end. Bill figures the taxable part of the distribution and his remaining basis on
Form 8606 (illustrated).
In 2013, Bill's IRA has a loss of $500. At the end of that year, Bill's IRA balance is $1,300 ($1,800 − $500). Bill's remaining basis in his IRA is $1,500 ($2,000 − $500). Bill receives the $1,300 balance remaining in the IRA. He can claim a loss for 2013 of $200 (the $1,500 basis minus the $1,300 distribution of the IRA
balance).
taxmap/pubs/p590-011.htm#en_us_publink1000230825Two other special IRA distribution situations are discussed next.
taxmap/pubs/p590-011.htm#en_us_publink1000230826You can tell the trustee or custodian of your traditional IRA account to use the amount in the account to buy an annuity contract for you. You are not taxed when you receive the annuity contract (unless the annuity contract is being converted to an annuity held by a Roth IRA). You are taxed when you start receiving payments under that annuity contract.
taxmap/pubs/p590-011.htm#en_us_publink1000230827If only deductible contributions were made to your traditional IRA since it was opened (this includes all your traditional IRAs, if you have more than one), the annuity payments are fully taxable.
If any of your traditional IRAs include both deductible and nondeductible contributions, the annuity payments are taxed as explained earlier under
Distributions Fully or Partly Taxable.
When you cash in retirement bonds, you are taxed on the entire amount you receive. Unless you have already cashed them in, you will be taxed on the entire value of your bonds in the year in which you reach age
701/2. The value of the bonds is the amount you would have received if you had cashed them in at the end of that year. When you later cash in the bonds, you will not be taxed
again.
taxmap/pubs/p590-011.htm#en_us_publink1000230830If you receive a distribution from your traditional IRA, you will receive Form 1099-R, or a similar statement. IRA distributions are shown in boxes 1 and 2a of Form 1099-R. A number or letter code in box 7 tells you what type of distribution you received from your
IRA.
taxmap/pubs/p590-011.htm#en_us_publink1000230831Some of the number codes are explained below. All of the codes are explained in the instructions for recipients on Form
1099-R.
- 1—Early distribution, no known exception.
- 2—Early distribution, exception applies.
- 3—Disability.
- 4—Death.
- 5—Prohibited transaction.
- 7—Normal distribution.
- 8—Excess contributions plus earnings/
excess deferrals (and/or earnings)
taxable in 2012.
Some of the letter codes are explained below. All of the codes are explained in the instructions for recipients on Form
1099-R.
- B—Designated Roth account distribution.
- G—Direct rollover of a distribution (other than a designated Roth account distribution) to a qualified plan, a section 403(b) plan, a governmental section 457(b) plan, or an
IRA.
- H—Direct rollover of a designated Roth account distribution to a Roth
IRA.
- J—Early distribution from a Roth IRA.
- N—Recharacterized IRA contribution made for 2012
and recharacterized in 2012. - P—Excess contributions plus earnings/
excess deferrals taxable in 2011. - Q—Qualified distribution from a Roth IRA.
- R—Recharacterized IRA contribution made for 2011
and recharacterized in 2012. - S—Early distribution from a SIMPLE IRA in the first
2 years, no known exception. - T—Roth IRA distribution, exception applies.
If the distribution shown on Form 1099-R is from your IRA, SEP IRA, or SIMPLE IRA, the small box in box 7 (labeled
IRA/SEP/SIMPLE) should be marked with an "X."
Federal income tax is withheld from distributions from traditional IRAs unless you choose not to have tax withheld.
The amount of tax withheld from an annuity or a similar periodic payment is based on your marital status and the number of withholding allowances you claim on your withholding certificate (Form W-4P). If you have not filed a certificate, tax will be withheld as if you are a married individual claiming three withholding allowances.
Generally, tax will be withheld at a 10% rate on nonperiodic distributions.
taxmap/pubs/p590-011.htm#en_us_publink1000230843In general, if you are a U.S. citizen or resident alien and your home address is outside the United States or its possessions, you cannot choose exemption from withholding on distributions from your traditional IRA.
To choose exemption from withholding, you must certify to the payer under penalties of perjury that you are not a U.S. citizen, a resident alien of the United States, or a tax-avoidance
expatriate.
Even if this election is made, the payer must withhold tax at the rates prescribed for nonresident aliens.
taxmap/pubs/p590-011.htm#en_us_publink1000230844For more information on withholding on pensions and annuities, see
Pensions and Annuities in chapter 1 of Publication
505, Tax Withholding and Estimated Tax. For more information on withholding on nonresident aliens and foreign entities, see Publication
515, Withholding of Tax on Nonresident Aliens and Foreign Entities.
Report fully taxable distributions, including early distributions, on Form 1040, line 15b (no entry is required on line 15a); Form 1040A, line 11b (no entry is required on line 11a); or Form 1040NR, line 16b (no entry is required on line 16a). If only part of the distribution is taxable, enter the total amount on Form 1040, line 15a; Form 1040A, line 11a; or Form 1040NR, line 16a, and enter the taxable part on Form 1040, line 15b; Form 1040A, line 11b; or Form 1040NR, line 16b. You cannot report distributions on Form 1040EZ or Form 1040NR-EZ.
taxmap/pubs/p590-011.htm#en_us_publink1000230846Generally, the value of an annuity or other payment receivable by any beneficiary of a decedent's traditional IRA that represents the part of the purchase price contributed by the decedent (or by his or her former employer(s)) must be included in the decedent's gross estate. For more information, see the instructions for Schedule I, Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return.
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