1099-r from tcf bank on an ira rollover

surfergalJanuary 23, 2006

Stupid TCF bank sent me a 1099R saying I had $15000 of reportable income from cashout of an IRA cd account. Yes, I cashed it out and reinvested it the next day at another bank with better interest rates. I told them it would be a rollover. Do I have to report this or worry about it as long as I have the paperwork from the reinvestment?

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The IRS won't know it's a rollover until you tell them so you need to report it. You can report it as a rollover so no tax will be due.

    Bookmark   January 24, 2006 at 11:33AM
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thank you -i will check the irs site for forms needed.

    Bookmark   January 24, 2006 at 7:25PM
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Ditto liketolearn. Its normal and required to get 1099 for the distribution, after all the first bank doesn't know what you actually do with the money. I had the same sort of situation, and as I went through TurboTax all was handled to show the reinvestment and no net distribution.

    Bookmark   January 25, 2006 at 2:46PM
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Did they withhold any taxes? If so and you only rolled over the amount of the check you received from them, you will owe taxes on the amount they withheld for taxes.

For example (I'm always better when I use a number example), let's say you withdrew $10,000 from your IRA to roll to another bank and took the money in the form of a check to take to the other bank. By law the bank is supposed to withhold 20% or, for this example, $2000 for Federal income taxes. That means you had a check for $8000 to put into the new IRA. If you did not replace the $2000 that was withheld so your rollover into the new IRA was a total of $10,000 (you only deposited $8000 in the new bank), you will owe taxes on the $2000. That $2000 will be treated as a premature distribution subject to a 10% penalty and income taxes at your marginal tax rate.

All of that "mess"(hopefully, you won't find yourself dealing with it) above could have been avoided if you had done a direct rollover where one bank transferred the money straight to the other and you never got the cash in hand.

Good luck

    Bookmark   January 26, 2006 at 7:34AM
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No there was no tax withheld - The deposit to the new bank was the exact amount shown on the 1099r from TCF. The people at TCF were to stupid to know how to do a rollover. First, I called them to tell them I was withdrawing. They said no problem, just come in. Then I got there they said sorry, we have no one here who knows how to do this, can you come back tomorrow. so I went back when they said and they still did not have anyone trained, so they were getting instructions over the phone from another bank. I had no choice.... I had the exact same experience with them when I put the money in. The put out the flier with the high rate of interest for a new deposit, but no one knew how to do it. I went back twice, and then they had to send me to another branch, who also hads to get phone instructions from another branch. Then, I got called to go back in twice, because they did the paperwork wrong they said, again, freaking idiots there ... I could not wait to take out the money. They never even sent me any statements or notiufications, when the interest retunrned to a normal rate.

    Bookmark   January 28, 2006 at 8:01PM
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There are two lines on a 1040. One for the withdrawn amount (non-direcvt rollovers included) and the other for the taxable amount. If you rolled over the entire amount the taxable line is zero. End of problem.

    Bookmark   January 29, 2006 at 9:58AM
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If I may intrude, I too withdrew a few matured IRA CDs in 2006 and thought it natural that because I reinvested it within one week into another bank, as an IRA (but with juicier interest hehehe) I wouldn't be sent the dreaded 1099R but I was. I've been handling my IRAs for years, and I don't recall being sent 1099s in the past for IRAs, but I think when my IRAs matured in those years, the institution would automatically give me some IRA forms which I presented to the bank opening my new rollover, hence, no 1099R...but I'm not sure. To avoid this I learned it's best to transfer from institution to institution which I'm just doing now. However, I have a problem about this particular rollover and hope someone could help?

I just today arranged a rollover/transfer of my matured IRA but only now, after having mailed all the papers, I remembered one cannot make more than ONE rollover per year. Since this new CD is only for 3 months with a terrific interest, if I don't like the new rate after the 3 month maturity I won't be able to roll it over until a year from the time I opened this new IRA account and will be stuck... :(

Am I correct? Or is there a way around to escape the new (probably) lower rates on maturity? One phone employee told me that on maturity it may go down about almost a whole percent (0.95%).

Thanks so very much for any suggestions! Adela

    Bookmark   May 9, 2007 at 10:52PM
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