WOW, Internal Revenue shock with CREF funds

[tednvon]

Hello,
Hope someone here can help. A month ago I got one of those scary letters from the IRS...you know, "Official Business." It said I failed to report almost $300,000 from CREF that resulted from a "sale of securities." Whoa!!!

Took to my tax guy and he helped do a response that actually got me a small refund as I had moved some funds from one account to another after some loses in mutual funds.
What I do not understand is "What the heck happened?" I have moved funds in Tiaa-Cref for years and never got a 1099. I have never drawn out a dime as of yet.
I am now scared to move any $$ from one fund to another.

This $$ has all been either 403b or Supplemental Funds (SRAs) that I put in for the over 50 y/o crowd. I "maxed out" my contributions that could be tax deferred during the mid to late 90's until I partially retired 2 years ago....

Help me to understand what funds in a totally tax deferred account can still generate a 1099 if moved from one account to another...Is it possibly the money that went in as SRA vs. 403B??

Thanks for any input...Ted

[brewer12345]

We don't have enough information to comment intelligibly. This was a ll deductible retirement contribution that got moved from one account to another but never left the confines of the retirement accounts? If so, it sounds like a mistake on the part of the IRS.

[grumpy]

Sounds to me like maybe your account custodian erroneously generated a 1099B and sent it to the IRS making it look like you sold shares in a taxable account and owed capital gains taxes?

Grumpy

[saluki9]

Don't worry, this happens all the time.

Many custodians will generate a 1099R even when doing a rollover or transfer even though there is no tax due. If the do enough of them eventually they send out a couple with taxable amounts on them (in error)

Don't be afraid of moving your funds if you need to.

[jazz4cash]

Originally Posted by tednvon

Hello,
Hope someone here can help. A month ago I got one of those scary letters from the IRS...you know, "Official Business." It said I failed to report almost $300,000 from CREF that resulted from a "sale of securities." Whoa!!!

Took to my tax guy and he helped do a response that actually got me a small refund as I had moved some funds from one account to another after some loses in mutual funds.
What I do not understand is "What the heck happened?" I have moved funds in Tiaa-Cref for years and never got a 1099. I have never drawn out a dime as of yet.
I am now scared to move any $$ from one fund to another.

This $$ has all been either 403b or Supplemental Funds (SRAs) that I put in for the over 50 y/o crowd. I "maxed out" my contributions that could be tax deferred during the mid to late 90's until I partially retired 2 years ago....

Help me to understand what funds in a totally tax deferred account can still generate a 1099 if moved from one account to another...Is it possibly the money that went in as SRA vs. 403B??

Thanks for any input...Ted

[jazz4cash]

Originally Posted by tednvon

Hello,
I have moved funds in Tiaa-Cref for years and never got a 1099. I have never drawn out a dime as of yet.
I am now scared to move any $$ from one fund to another.

What I meant to says was..........it sounds like you DID NOT get a 1099, and that's why the IRS letter was a surprise? Hey, some folks will do anything for a refund

Seriously, what does CREF say? Do they admit generating a 1099 to IRS and not you? How is the transaction identified on the confirmation?

[tednvon]

Thanks all,

Looks like it was an error by CREF sending it out...Looking back, I did get the 1099 but in my ignorance I just put it with records and did not "report" it as I assumed it was tax deferred account so it did not need to be reported....well, will not do that trick again!!!!

Thanks for the support...It looks like I can do my moving money plan once a year to from Index Stock Fund to cover the 5th of 5 years in cash without panic setting in...

All the best and again, this board has taught me so much.

New folks reading...LISTEN AND LEARN...You do NOT have to understand how a computer works to use one and you do not need to know how to build an airplane to fly in one....in other words, you do not have to understand the ins and outs of Wall Street to manage your own "boring" portfolio with very low fees and a majority of stocks via an index fund.
Peace...Ted