Stop Payment on an IRA Transfer
We just received a returned item request on a check that was deposited as an IRA Transfer 7 days ago and apparently had a stop payment placed on it. The client says they are going to now take a distribution of these same funds from the other IRA Custodian and rollover the funds to us. The client did not notify us before the stop payment was made nor did they request a revocation of the deposit. Can we still code the withdrawl of the stop payment funds as a revocation or are we required to report this as a distribution?
I’ve worked with IRAs since 1998 and this is actually the first time I’ve ever seen this happen and I don’t remember ever having discussed this possible scenario with anyone in the past.
Permalink Submitted by Marvin Rotenberg on Tue, 2008-12-30 18:26
I don’t think this would be considered a revocation because client wanted the account. It could be considered a revocation if the money was going to a new IRA. On a trustee to trustee transfer forms 5498 & 1099R are not needed. I would suggest contacting the custodian and ask them how they are going to handle this. It in fact may differ from custodian to custodian.
Marvin