Question

NO 1099 for an IRA distribution via an arbitration remediation

Forum|Forum|4 years ago
February 6, 2022
2 replies
0 views

My financial advisor, a major company, had a fund in my account that later had to settle a dispute. I got a $520 settlement check, called a distribution from the fund arbitrator. The arbitrator website says if the amount is less than $600 I will not get a 1099 which seems like BS. I don't have the TIN for the Fund or the Arbitrator. They have a phone number and promise not to give tax advice. If I did not get a 1099 does this mean the IRS also did not get information? Should I claim other income and list the arbitrator's name? Ignore it and go on? What should I do?

ColeenD3

Yes, the rule is that if the amount is less than $600, there is no requirement to issue a 1099. However, it is still income.

You can create a substitute 1099-R.

Substitute 1099-R

If your plan administrator doesn't give you Form 1099-R for 2020 (or the one you receive is wrong and your plan administrator refuses to correct it), do your best to obtain the form or correction before completing a substitute on Form 4852.

You'll be required to:

- describe your communications with the plan administrator in your attempt to get the form, and

- attest to the IRS that you were unable to obtain it.

Complete a Form 1099-R as if you actually received the correct form. Enter as much information about the payer as you can, including name, address, and the amounts for 2020. Then complete the information for the substitute form.

Type 4852 in the search box then select the Form 4852 form and click Open Form button. Follow the directions at the top of the page for entering the 1099 R information

M

Mike9241

not much to go on. however, since this involved a fund held by an IRA it probably should have gone into the iRA. no EIN no 1099. technically, I think if you're under 55, this could be deemed an early distribution subject to early withdrawal penalty. i at the very least this should be reported as misc income.

D

dmertz

Employee

The rule for a Form 1099-R is that amounts of $10 or more (not $600) must be reported on Form 1099-R. The $600 threshold is for a 1099-MISC. If they refuse to provide the Form 1099-R, you'll need to do the substitute Form 1099-R (Form 4852).