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Need help in doing IRS form to report qualified Roth IRA distribution
Old 12-08-2010, 01:00 PM   #1
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Need help in doing IRS form to report qualified Roth IRA distribution

OK, here is my situation. I have a certain amount of lifetime Roth contributions and Roth conversions seasoned at least 5 years that have not been exhausted by earlier Roth distributions, and therefore am able to take a qualified distribution from a Roth account. However, my custodian will not honor my request to document this distribution as being qualified.

So, as the IRS will get a form stating that this distribution is non-qualified, I need to know how to properly document this distribution. I called the IRS, and was told to fill out a form 5598, which doesn't exist , but probably was meant to be 5498, that itself only seems to deal correcting a mistake in contribution for the current tax year, and does not address the distribution. . And of course, the custodian won't even tell me what form to fill out, and I was advised to hire a tax advisor.

So I figure that before I waste more time with the IRS help, I should ask the folks here - hopefully, someone has been in this situation and knows what to do.

On a side note, I'd like to know of any good brokerage that also has a bank on the side that makes distributions to a checking account painless - and obviously one that would allow me to dictate the terms of the reporting to the IRS. And also, allows me to do no-fee no-load mutual fund trades. I'm considering being a full Boglehead on this account - does Vanguard hve a checking account? And by checking account, I mean one that would allow me to have vendors automatically debit payments and me to get cash from an ATM - not just simply check writing privileges.

Oh, and don't recommend the stagecoach bank - they're the ones screwing me over.
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Old 12-08-2010, 01:39 PM   #2
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WellsFargo/WellsTrade PMA package is a combined checking account with a brokerage account. If you have $25K of assets, then everything is free. You can even buy/sell Vanguard mutual fund shares without paying a commission which no other broker offers, not even Vanguard Brokerage Services.
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Old 12-08-2010, 01:42 PM   #3
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WellsFargo/WellsTrade PMA package is a combined checking account with a brokerage account. If you have $25K of assets, then everything is free. You can even buy/sell Vanguard mutual fund shares without paying a commission which no other broker offers, not even Vanguard Brokerage Services.
Like I said, the stagecoach bank is screwing me over on this. Otherwise, their deal is very good.
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Old 12-08-2010, 01:50 PM   #4
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Well, you don't have far to go: Bank of America can screw you over as well. I think their deal is now with ML Edge.
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Old 12-08-2010, 02:41 PM   #5
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suggest you ask here in the retirement subforum
Fairmark Forum :: Retirement Savings and Benefits
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Old 12-08-2010, 02:42 PM   #6
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Quote:
Originally Posted by swampwiz View Post
OK, here is my situation. I have a certain amount of lifetime Roth contributions and Roth conversions seasoned at least 5 years that have not been exhausted by earlier Roth distributions, and therefore am able to take a qualified distribution from a Roth account. However, my custodian will not honor my request to document this distribution as being qualified.

So, as the IRS will get a form stating that this distribution is non-qualified, I need to know how to properly document this distribution. I called the IRS, and was told to fill out a form 5598, which doesn't exist , but probably was meant to be 5498, that itself only seems to deal correcting a mistake in contribution for the current tax year, and does not address the distribution. . And of course, the custodian won't even tell me what form to fill out, and I was advised to hire a tax advisor.

So I figure that before I waste more time with the IRS help, I should ask the folks here - hopefully, someone has been in this situation and knows what to do.

On a side note, I'd like to know of any good brokerage that also has a bank on the side that makes distributions to a checking account painless - and obviously one that would allow me to dictate the terms of the reporting to the IRS. And also, allows me to do no-fee no-load mutual fund trades. I'm considering being a full Boglehead on this account - does Vanguard hve a checking account? And by checking account, I mean one that would allow me to have vendors automatically debit payments and me to get cash from an ATM - not just simply check writing privileges.

Oh, and don't recommend the stagecoach bank - they're the ones screwing me over.
Are you >= 59 1/2? Has it been at least 5 years since Jan 1 of the year in which you made your first Roth investment?

If yes to both, this is a qualified distribution. If no to either, it is more complicated and you need to go through other tests.

Life is too short to deal with mistreatment of this form. Do not take any withdrawals from this custodian, find a service oriented broker like Fidelity, Schwab or E-Trade, or perhaps Vanguard, and rollover to a Roth with them. At E-Trade as little as $250K gets you some special status and access to a local human to help you out.

Ha
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