Cost Basis
Do we report Cost Basis for qualified accounts?
Yes Or No
No
When did the SECURE Act go into effect?
January 1, 2020
What is the mailing deadline for qualified and non-qualified tax statements?
Qualified: Jan. 31st
Non-Qualified: Feb. 18th
Are we able to Recharacterize a Roth conversion? If so, what is the deadline?
Recharacterizing a Roth conversion is not allowed.
What is the deadline to have a contribution coded as prior year?
If the client updates the cost basis after a tax statement is generated do we send them amended tax statements?
No.
Non-Covered tax lots are not report to IRS. Client will need to work with a tax professional to report cost basis.
At what age does the client need to take their RMD if they turn 70 1/2 in 2020?
Age 72
If the client makes a contribution after Dec. 31st. When will the client receive their 5498?
The client will receive an amended tax statement in May.
What is the deadline to recharacterize a contribution? With and without an extension.
If we make a correction on a client's 1099-R. When will the client receive their amended tax statement?
3-4 weeks.
*1-2 weeks to process case
*1-2 weeks to receive tax statement
If there is a reclassification, will we generate a new tax statement for the client?
Reclassifications will generate a new tax statement.
Critical: Ameriprise is not notified prior to reclassification, therefore will not cover refilling fees
At what age can a client no longer contribute to their traditional IRA?
There is no age limit.
The SECURE Act eliminates the age limit of 70 1/2 for workers who contribute to the traditional IRA
Why would a client NOT receive a 1099-DIV or 1099-INT for a non-qualified account?
If client receives less than $10 of dividend and interest income in a calendar year.
What type of taxable event will we automatically calculate earnings and losses for the client?
Excess removal and Recharacterization if the tax year is open
A client missed the deadline for taking their RMD. How do they correct it?
The client would want to remove their RMD immediately and work with a tax profesional and fill out IRS form 5329
What tax statement will the client receive to report cost basis information, in addition to the gain or loss information for any covered shares sold?
Form 1099-B
How many years does a non-spousal beneficiary have to deplete the account if they inherit the IRA account in 2020?
Within in 10 years of inheriting the account.
Spousal beneficiaries can continue to stretch their IRAs over their lifetime. Non-spousal beneficiaries who inherit their account in 2019 can continue to deplete the account over their lifetime
What is the deadline to update a client's address or TIN to have it reflect on the tax statement?
January 3rd
An advisor made a current year contribution into a clients Simple IRA by mistake. How does he correct the coding to a Prior year contribution?
He cannot change the coding.
Per IRS guidelines IRA custodian are required to code the contributions for the tax year they are received regardless of the year they were intended for.
How is the cost basis reported when journaling equities and mutual from a qualified account to non-qualified account?
Covered and Non-covered lots are stepped up to the market price on day of transfer.
ASK 3067
What is the amount a client can take out without penalty to help with costs related to a child's birth or adoption with no regards to the 60 day rule?
$5000
What is the deadline to have the account coded to receive an early tax statement for qualifying occupations (Example: Farmer, Fisherman, Rancher)?
December 31st
Advisor is trying to change a contribution made in a Traditional IRA to become a Roth contribution for the year of 2019 before tax deadline. What transaction are they trying to accomplish?
Recharacterization
What is the appropriate case to use if we are making a prior year correction vs current year correction?
Account Service ^ Correction ^ Qualified