I have a client that made a ROTH contribution in May 2016 in the amount of $ 5,500.00.
He does not have eligible earnings.
His only income is a taxable educational stipend and small dividends and capital gains.
Amounts will be withdrawn prior to filing his 2016 tax returns.
My understanding is that the earnings through the date of withdrawal are 2016 income and the is subject to the 10% penalty (client under 59 1/2).
The broker will be transferring the securities to a taxable account and currently, it is estimated that earnings will be $ 750.00.
Client will not receive a 1099-R for 2016, but will for 2017.
I use Lacerte for tax prep and am at a loss as to how to enter the amounts
Any help on how to report this on the 2016 tax returns will be greatly appreciated.
Thanks, Tony
------------------------------
Anthony Attina
ANTHONY ATTINA C.P.A., P.C.
Middle Island NY
------------------------------