rollover?

Forum|Forum|4 years ago
April 17, 2022
2 replies
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Husband cashed out IRA and wife re-invested majority of amount in new IRA. How would this be handled when filing in Turbo Tax?

PattiF

The husband would receive a 1099-R for the withdrawal of the funds in his IRA.

If the wife contributed these funds to a new IRA for herself, she will receive a Form 5498 for the IRA contributions.

This is not a rollover of funds. The IRA is an individual retirement account and not a spousal retirement account.

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macuser_22

Employee

Explain what you mean by "wife re-invested majority of amount in new IRA"? In another IRA in husbands name? If husbands, was it done within 60 days of the distribution?

If in wife's name then it is a new contribution.

The maximum IRA contributions for 2021 is $6,000, or $7,000 if you’re age 50 or older by the end of the year; or your taxable compensation for the year which ever is less.

(Taxable compensation is generally wages that you worked for - W-2 or net self-employed income minus the deductible part of the SE tax, but can include commissions, certain alimony and separate maintenance, and nontaxable combat pay ).

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**