earnings on contrib withdrawn – year taxable?

client makes traditional ira contribution april 09 for 08. later determines ira contribution not deductible due to active participant rules. client wants to withdraw ira contribution and related earnings by extended due date of tax return, 10-15-09. when are the earnings taxable? 08 return or 09 return? irs publ seems to suggest 08 return but literal reading of irc suggests 09 tax return.



The earnings are taxable in 2009. A Form 1099 will be issued for the earnings for 2009.



Add new comment

Log in or register to post comments