Discussion:Non-cash IRA distribution
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Discussion Forum Index --> Advanced Tax Questions --> Non-cash IRA distribution
Discussion Forum Index --> Tax Questions --> Non-cash IRA distribution
Chris2lane (talk|edits) said: | October 12, 2009 |
| I have a dilemma on how to handle an IRA distribution. My client, aged 70, received a 1099R for tax year 2008. The 1099R showed a distribution of $100,000. The problem is, my client never received cash of $100,000. It was a promissory note from the investment funding group. It turns out that this investment funding group was involved in a ponzi scheme. In essence, the custodian placed this $100,000 value on a worthless note. The custodian based this amount on the guidance from the investment funding group. The custodian refuses to issue a corrected 1099R to my client. As it stands right now, he is left holding a 1099R showing a $100,000 distribution on a worthless note. Has anyone had an experience with this? Any guidance would be helpful. | |
| 12 October 2009 | |
| Discussion:Worthless investment in an IRA
Sounds like the IRA trustees are cleaning house. | |
| 15 October 2009 | |
| An educated guess and similar situations have been handled as follows: list the income as you ordinarily would from the IRA. Then on line 21 of form 1040 subtract the 100,000 back out with your note that it was a fraudulent note and that no funds were ever constructively received most likely never will be. There may be other moves required further down the line but that is where I would start...of course to be perfectly safe an attorney should be consulted by your client....my response was what an attorney suggested in a similar situation... | |
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