My Form 1099-R is incorrect

Forum|Forum|5 years ago
February 20, 2021
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I sold 200 shares of AAPL stock in my SEP / IRA account [number removed] for $56,431 and I gifted 100 shares of AAPL to each of my three children. My Form 1099-R shows a Gross Distribution / Taxable Amount of $92,899.25. That amount is incorrect because the 300 share of AAPL were gifts. Meanwhile, an agent of TD Ameritrade informed me that they have only one Distribution code (7) so they cannot discriminate between taxable distributions and non-taxable gifts. Furthermore, the IRS uses the amount designated by TD Ameritrade's 2020 Form 1099-R to compute my 2020 tax. When I tried to contact my local IRS office to make an appointment to discuss the problem, I was shuffled back and forth by their bots and I could not make an appointment. Logically, that means I will have to go to the IRS Office, take a number, wait to be served, told that I need to make an appointment. make the appointment for another day, then go home and wait until that day comes to pass. I say "Logically" because that happened to me in the past.

What to do? Inquiring mind wants to know.

David S

DoninGA

Employee

Why do you think the gifts given to individuals would reduce the taxable amount of the distribution?

Gifts given to an individual are not reported on a tax return. Gifts received from an individual are not reported on a tax return, regardless of the amount received.

If your gift given to an individual is greater than $15,000 then you are required to report the gift given on an IRS Form 709. There are no gift taxes owed if your total of all gifts ever given is less than $11.58 million.

TurboTax does not support Form 709. The Form 709 is not sent with your federal tax return. It is filed separately and mailed to the address shown in the Form 709 instructions

Go to this IRS website for a Form 709 - https://www.irs.gov/forms-pubs/about-form-709

dubina666Author

"Why do you think the gifts given to individuals would reduce the taxable amount of the distribution?"

"Gifts given to an individual are not reported on a tax return."

TD Ameritrade reported my sales of AAPL (100 + 100) shares correctly, but they also reported my gifts of AAPL (100 + 100 + 100) shares on their 1099-R. They used Distribution code (7) for both transaction sets because they have no other way to code it. I was told that by one of their SEP / IRA agents. He told me to ask the IRS to sort it out.

Over.