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Posted by davidrosenbaum on May 25, 2008, 4:36 pm
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> > >I have a client whose father invested in IRA's. The father died, and
> > >the son received the IRA's as the residual beneficiary of the account,
> > >and this money didn't go through probate (that's what he says).
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> > >For some reason, there was a transaction performed and part of the IRA
> > >was redeemed and immediately reinvested in the same shares. He claims
> > >it was a mess-up on the part of the broker. But the strange this is
> > >that he received a 1099-B for the "sale"of those shares.
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> > >Of course, he has no idea of the cost basis of those shares or whether
> > >his father had any nondeductibe contributions to the IRA.
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> > >Can anyone make heads or tails of this?
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> > If he was the named beneficiary of the IRA, then the IRA does
> > not become part of his probate estate.
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> > Unless he asks for the IRA to be distributed to him as new owner
> > of the IRA, the proceeds should not have been distributed.
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> > Ordinarily, he would ask the IRA custodian to re-register the IRA
> > as John Doe as Beneficiary of James Doe IRA or very similar.
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> > If he never asked for a distribution, and the IRA custodian will
> > not own up to its responsibility to make this whole, then this
> > now becomes a legal matter, and he needs legal advice.
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> A form 1099-B for an IRA (inherited or not) is an error. What is important
> is the 1099-R.
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> If the broker issued a 1099-B for the sale from the IRA account, the broker
> really screwed up - unless the account wasn't an IRA after all.
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> --
Thanks everyone.
I also thought that there shouldn't be a 1099-B, as you say.
And Phil, I agree with your analysis. I told him pretty much the same
thing. He gave me no info re the IRA - said there was none. But he's
now checking it. The 1099-B was issued on his name.
Hopefully he'll get me some IRA info and then we can see.
David
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