RMD sent to church but only 1 1099
A LITTLE CRAZY SITUATION AND HOPEFULLY YOU CAN HELP.
CLIENT RMD’S FOR 2020 WHERE OVER 20K. HE DID NOT WAIVE THEM.
OUT OF ONE OF HIS VARIABLE ANNUITIES WITH A LIFETIME INCOME BENEFIT HE HAD THE COMPANY SEND A CHECK DIRECTLY TO THE CHURCH THE AMOUNT OF $5,720 TWICE IN 2020 (TOTAL WAS 11,440)
HOWEVER, THE WE EXCEEDED THE LIFETIME INCOME ON THE CONTRACT DUE TO THE INCEPTION DATE WAS ONE DAY PRIOR. SO WE HAD THE CLIENT SEND IN FROM HIS REGULAR CHECKING ACCOUNT $5720 TO MAKE SURE THE LIFETIME INCOME WAS INTACT.
HE RECEIVED HIS 1099 FOR THE COMPANY WITH ONLY $5720 GOING TO THE CHURCH BUT NOT THE $11,440 WHICH BOTH $5720’S WENT TO THE SAME CHURCH DIRECTLY FROM THE COMPANY AND NOT GOING TO HIM FIRST.
HOW DOES HE EXPLAIN TO HIS CPA THAT $11,440 WENT TO THE CHURCH WHEN IT ONLY SHOWS $5720 AS A 1099?
THANK YOU FOR ANY ASSISTANCE
DOUGLAS
Permalink Submitted by Alan - IRA critic on Wed, 2021-07-07 22:17
was the 5720 client sent to the insurance company coded as a regular IRA contribution or as a rollover contribution? His IRA statements should indicate which it was, if he has not yet received the 5498. The Secure Act eliminated the age maximum for making IRA contributions. And if it was coded as a rollover contribution, he must not have used up his one rollover for a 12 month period. This all affects how the IRA distributions must be reported.