Permalink Submitted by Alan Spross on Wed, 2010-03-17 00:03
Usually. But a SS disability award is not conclusive evidence of meeting the IRA disability exception, which is more stringent. It would therefore be advisable to get a physician statement that the person cannot perform any gainful activity due to physical or mental condition and that the condition is expected to be of long and indefinite duration (Sec 72(m)(7) definition). Submit a copy to the IRA custodian and request a code of 3 (disability) on the 1099R. If the 1099R has already been issued, the code can be changed on a 5329 by the taxpayer.
If the custodian will not issue the exception code, the 5329 can be used, but this is not as secure as when the custodian assigns the 3 code. The person should keep the physician statement in the event the IRS requests further evidence of disability that meets the definition as follows:
Permalink Submitted by Alan Spross on Wed, 2010-03-17 00:03
Usually. But a SS disability award is not conclusive evidence of meeting the IRA disability exception, which is more stringent. It would therefore be advisable to get a physician statement that the person cannot perform any gainful activity due to physical or mental condition and that the condition is expected to be of long and indefinite duration (Sec 72(m)(7) definition). Submit a copy to the IRA custodian and request a code of 3 (disability) on the 1099R. If the 1099R has already been issued, the code can be changed on a 5329 by the taxpayer.
If the custodian will not issue the exception code, the 5329 can be used, but this is not as secure as when the custodian assigns the 3 code. The person should keep the physician statement in the event the IRS requests further evidence of disability that meets the definition as follows:
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Permalink Submitted by [email protected] on Wed, 2010-03-17 00:16
Thank you very much Alan. I always appreciate your contribution to this forum.