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Old 02-26-2018, 12:37 PM
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IRA Loan

Wife borrowed $175,000 from her IRA in 2017 to purchase our new home. It was paid back within 60 days, using proceeds from the sale of a home, making the loan non taxable. However, the 1099 indicates that loan as a taxable distribution. Found out the 175,000 repaid will be reported on form 5598 as late as May 31. How can I file my taxes by April 17 without that 5598? Ameritrade says there?s a way, but can?t provide tax advice.



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Old 02-27-2018, 02:25 AM
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Wife borrowed $175,000 from her IRA in 2017 to purchase our new home. It was paid back within 60 days, using proceeds from the sale of a home, making the loan non taxable. ============>>>you can use your IRA to take a short-term loan, without having to pay taxes or penalties on the amount borrowed; If your need for money is short-term, you can take advantage of the tax-free rollover provisions in the IRA laws. However, The IRS considers money that you borrow from a traditional IRA account a taxable distribution. This means that you must pay taxes on the loan proceeds at your income tax rate. If you are under age 59 1/2, you will also owe a 10 percent tax penalty on the money that you borrowed, unless it qualifies for an exemption. The taxes on this loan will be due for the tax year that you took the disbursement. If you pledge your traditional IRA account as collateral for a loan, the IRS considers the entire balance of the account a distribution, and you will owe income tax and any applicable penalties on the balance of the IRA.

However, the 1099 indicates that loan as a taxable distribution. Found out the 175,000 repaid will be reported on form 5598 as late as May 31. How can I file my taxes by April 17 without that 5598? =============>>If you received a 1099-R, then enter that form in your return. You won't find this form in IRS website, nor do you file it with your tax returnYour IRA trustee or issuer , not you, is required to file this form with the IRS by May 31. The "custodian" of your IRA, typically the bank or other institution that manages your account, will mail a copy of this form to both you and the IRS.on the type of IRA you have, you may need Form 5498 to report IRA contribution deductions on your tax return.
You may receive the Form 5498 later. IRA custodians have until 5/31/17 to furnish you a copy. This is because you can contribute for the previous year up to the due date, 4/18/17. If you need some other information on Form 5498, call the IRA custodian and inquire.



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Old 02-27-2018, 09:46 AM
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If I report the distribution on my taxes, I’ll have to pay taxes on it. I can’t wait until May to file. Can I just not report the 175,000, knowing the 5598 is coming later.



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Old 02-28-2018, 07:12 AM
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Originally Posted by Crazymace View Post
If I report the distribution on my taxes, I?ll have to pay taxes on it. I can?t wait until May to file. Can I just not report the 175,000, knowing the 5598 is coming later.
I do not think so; you may file amended return for refund. You shouldconsider filing an amended tax return if there is a change in your filing status, income, deductions or credits An amended return cannot be e-filed. You must file it on paper.



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Old 02-28-2018, 08:33 AM
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I can’t pay tax on $175,000 and then wait for a refund. There must be a way to account for the rollover when filing my taxes. I was told by my trustee there was, but they can’t give tax advice. Otherwise, I get penalized for playing by the rules.



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Old 02-28-2018, 09:54 PM
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Originally Posted by Crazymace View Post
I can?t pay tax on $175,000 and then wait for a refund. There must be a way to account for the rollover when filing my taxes. I was told by my trustee there was, but they can?t give tax advice. Otherwise, I get penalized for playing by the rules.
Then please contact an IRS Enrolled Agent/ a CPA doing taxes i n your local ares for your fed/state tax returns for accurate professional help



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Old 02-28-2018, 11:09 PM
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Originally Posted by Wnhough View Post
Then please contact an IRS Enrolled Agent/ a CPA doing taxes i n your local ares for your fed/state tax returns for accurate professional help
I plan on doing that, but was hoping someone on this forum could help me. I’ve never paid anyone to do my taxes.



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