• Go to page :
  • 1 2
  • Text Only
Statement cycle has turned: no letter from the broker notifying me that anything is amiss, no phone call, I even contacted customer service to inquire about something else and they didn't make a peep about this.

However, since I know that something's wrong I've decided of my own accord that, inspired by the tremendous moral fiber of the business, political, and religious leaders of our great nation, I will begin paying $1 per month and will continue making these payments until I've satisfied my own conscience that this broker has been made whole.

I know, you must be thinking that this gesture is unprecedented in its magnanimity, but I once dated a girl who received a social security overpayment and those were the terms they offered to her. So, since I know my broker also made this overpayment out of government money, and also given the rates at which the government is currently repaying its own creditors, these are clearly the only reasonable terms for a person in my own situation.

And as to being blacklisted?...A man of utmost integrity like myself never worries about such things because I, like all other productive businessmen, always honor my obligations and I am certain that my unambiguously voluntary restoration of the missing dollars (slowly and painstakingly accounted for one by one to avoid further mistakes of this nature) will spur any potential accusers and judges to agree.

SUCKISSTAPLES said:   Isn't lackland on military road in san Antonio ? I almost got arrested after My friend was doing 110 down that street

That is SW Military home of all of SA's street racers. Sort of like 8 Mile rd in Detroit. There used to be a policeman nicknamed "9 line Mike Hime" because every arrest report was the same nine lines. SW Military was his favorite hangout.

USFinA you really do want to sort this out before the letters containing Important Tax Information on your IRA accounts come out in June. Things won't completely match and the IRS will want to know why. Just be sure they give you your Miranda warning before you answer.

Found some queries from folks in similar situations:
-An investor http://www.irahelp.com/forum/viewtopic.php?f=1&t=3747
-A custodian http://benefitslink.com/boards/lofiversion/index.php/t51450.html

And it does seem that after committing such an error the only thing a custodian can do is ask "pretty please with sugar on top", otherwise pound sand.

USFinA said:   Statement cycle has turned: no letter from the broker notifying me that anything is amiss, no phone call, I even contacted customer service to inquire about something else and they didn't make a peep about this.

However, since I know that something's wrong I've decided of my own accord that, inspired by the tremendous moral fiber of the business, political, and religious leaders of our great nation, I will begin paying $1 per month and will continue making these payments until I've satisfied my own conscience that this broker has been made whole.

I know, you must be thinking that this gesture is unprecedented in its magnanimity, but I once dated a girl who received a social security overpayment and those were the terms they offered to her. So, since I know my broker also made this overpayment out of government money, and also given the rates at which the government is currently repaying its own creditors, these are clearly the only reasonable terms for a person in my own situation.

And as to being blacklisted?...A man of utmost integrity like myself never worries about such things because I, like all other productive businessmen, always honor my obligations and I am certain that my unambiguously voluntary restoration of the missing dollars (slowly and painstakingly accounted for one by one to avoid further mistakes of this nature) will spur any potential accusers and judges to agree.


OK, we get it. By stealing money that is not yours you have made a magnificent, symbolic statement against "THE MAN" and we should all applaud and cheer your actions. You have been most magnanimous to share with us your glorious story of the righteous and epic crusade against the evil brokerage whose money you have stolen. After all, as we all know, because other people in finance have engaged in bad behavior that means you are to be completely supported and applauded for your actions designed to teach "THE MAN" a lesson. As a child I was often told by my elders that I should not act badly just because others did so, but I knew they were wrong, and I knew that one day some Hero of The People would come and demonstrate for us all that it is our right to steal other peoples money because somewhere, at sometimes, some banks and brokerages did bad things.

Truly, you are a most righteous judge and we are in awe of your divine judgement against "THE MAN" via stealing from this brokerage. We all stand in awe of the great gesture you have done here for the common man against the evil banks. We are all so blessed that you have chronicled your intention to defraud and steal from the brokerage in this thread.

Sir, as you undoubtedly know, you are a true man of the people - our modern day Robin Hood - and I am sure the tale of your tireless fight against "THE MAN" will be told down through the ages. We shall make songs of your heroic deeds, and pass down this thread as a legendary show of heroism against "THE MAN" throughout all the ages of Fatwallet Finance.

nsdp said:   USFinA you really do want to sort this out before the letters containing Important Tax Information on your IRA accounts come out in June. Things won't completely match and the IRS will want to know why. Just be sure they give you your Miranda warning before you answer.

If things don't completely match then it will, fortunately, be the custodian and not I that will need to be read a Miranda warning in June because it says right here in pub590 that the penalty for THEM engaging in such a mistake is a 100% tax on the prohibited amount:
Taxes on prohibited transactions. If someone other than the owner or beneficiary of a traditional IRA engages in a prohibited transaction, that person may be liable for certain taxes. In general, there is a 15% tax on the amount of the prohibited transaction and a 100% additional tax if the transaction is not corrected.
http://www.irs.gov/publications/p590/ch01.html#en_US_2011_publin...

So my custodian is royally screwed no matter what they do: If they report it as a prohibited transaction then they'll lose the full amount to the IRS as tax and if they don't report/interpret it as a prohibited transaction then they'll lose the full amount to me (or at least have to accept my repayment terms of $1 transferred back per month)...oh well being an IRA custodian is a serious legal responsibility and if they weren't up to the task then I guess they shouldn't have offered to do it.

USFinA said:   $1 per month
not only is that a jerk move, but it feels like making $1 deposits is more likely to ensnare you further in this mess than if you just ran away from it.

But mainly, it's a jerk move.

A true FWFer would schedule a series of 5 cent payments to satisfy minimum monthly transaction requirements for all their rewards checking accounts.

markkundinger said:   USFinA said:   $1 per month
not only is that a jerk move, but it feels like making $1 deposits is more likely to ensnare you further in this mess than if you just ran away from it.

But mainly, it's a jerk move.


You're right $1 per month is almost taunting for retaliation especially since I don't even have any investments that pay monthly dividends...so instead I'll make it the full cash flow distributed by 10 shares my favorite ETF which is currently about ~$3/quarter and expected to grow with inflation.

But as to being a jerk? Well, corporations aren't human beings so if anyone's offended by my inhumane treatment of them then I suggest they stop hiding behind the corporate veil and start taking responsibility as human beings. Otherwise it'll be a cold day in hell when I give mercy to a ruthless business challenger who utilizes legal fictions in an attempt to take advantage of me, my fellow citizens, and my government.

donotdrinkPBR said:   A true FWFer would schedule a series of 5 cent payments to satisfy minimum monthly transaction requirements for all their rewards checking accounts.

Can't b/c RCAs aren't available in IRAs.

I have to agree with you that if the roles were reversed and the company ended up with your money by a mistake on your part, you might have to sue them to straighten it out. If I were you, I'd expect to be served a summons to appear within the next couple of months. Your downfall will be the $1/per month offer that shows your admission. I'd expect a judgement for the full amount, but that doesn't mean you will have to pay them unless the funds are somehow moved into a non-retirement account that can't be protected via a bankruptcy.

I may have missed it, but do you have garnishable income or assets that can't be protected in a Chapter 7?

delzy said:   I have to agree with you that if the roles were reversed and the company ended up with your money by a mistake on your part, you might have to sue them to straighten it out. If I were you, I'd expect to be served a summons to appear within the next couple of months. Your downfall will be the $1/per month offer that shows your admission. I'd expect a judgement for the full amount, but that doesn't mean you will have to pay them unless the funds are somehow moved into a non-retirement account that can't be protected via a bankruptcy.

I may have missed it, but do you have garnishable income or assets that can't be protected in a Chapter 7?


You must be joking. Do you know what the first question is going to be if they file with the court? "Did you ask for the money back?" And if the answer is no? The court will tell them to take a hike! And if the answer is yes? Then maybe I'll get a summons and when I appear the first question will be, "Is he paying you back?" And if the answer is yes? Then again, get lost!

Why would it be my downfall to admit that they made an over transfer? It's not like they wouldn't be able to prove that's what happened. And if I'm already paying them then why should I care if they get a judgement?

No sir I can tell you what's going to happen is it's going to be years before these lumbering morons even bother asking me for the money and then, when they finally do, they will try to send a summons but by then they won't know where to serve me so they'll pound sand and we'll all live happily ever after. The End.

Muhahahah! When I saw the OP's thread title, my first line of thought was, "I probably don't know how to help you, but buddy, man are you screwed!" lol

USFinA said:   8. Duplicate cash suddenly appears the next day at the "source" brokerage and I use it to purchase long dated treasuries to keep it safe. So now that it has been a couple of weeks since the OP, I am going to have to go off on a little bit of a tangent. But first, so basically you took a "willful" action and cannot make any claim of ignorance.

Except, that long term treasuries are anything but "safe". We are in a modern historically low interest rate environment with the government printing money like there is no tomorrow. Yet there is a tomorrow and there is massive interest rate risk. Going long in such an environment, thinking it is safe, is truly investment ignorance.

USFinA said:   ...I once dated a girl who received a social security overpayment and those were the terms they offered to her.

Was this in 1943?

USFinA, I count at least twelve statements on your part here that constitute admissions of guilt on your part by using the "ostrich or willful blindness" instructions as to guilt. Excellent law review article from the Journal of Criminal Law and Criminology. Hope you are good at making cabinets. http://www.jstor.org/discover/10.2307/1143906?uid=3739920&uid=2&...

OP, quite likely your account at Merrill no longer counts as an IRA.
Pub. 590 said: Prohibited Transactions
...
Borrowing money from it.
...

Effect on an IRA account.Generally, if you or your beneficiary engages in a prohibited transaction in connection with your traditional IRA account at any time during the year, the account stops being an IRA as of the first day of that year.

By reversing a transfer and wiring the money out of an empty account, Merrill could easily argue that you borrowed from your account (and them). They can then disqualify your IRA, and declare that you personally owe them the money.

It wouldn't surprise me if it takes some weeks for Merrill to contact you regarding the problem, but I am quite sure that they will. Don't think that you'll escape liability because you think you didn't cause it. Both reversing a transfer and wiring money out is what caused the problem, and you initiated both of those actions. If I were you, I'd try to get ahead of the problem rather than risk this spiraling into something where the IRS gets involved when very strange Forms 5498 start appearing.

ThePessimist said:   By reversing a transfer and wiring the money out of an empty account, Merrill could easily argue that you borrowed from your account (and them). They can then disqualify your IRA, and declare that you personally owe them the money.
No, he didn't borrow from them - he took a withdrawal, which, under the rollover rules, is not even going to get counted as a distribution since its been returned to an IRA account within 60 days. Also, Merrill is not the one who can decide on disqualifiying your IRA - thats the IRS's job.

Now it's true that as a result of the reversed transfer, the IRA has borrowed money from Merrill. But borrowing isn't disallowed for IRAs, just borrowing from you or your relatives, and while it's possible to claim your custodian should be included in that group of disallowed counter parities, I don't think the IRS is actively pursuing anything along those lines and is considering giving waivers as well for technical infractions not intended under the spirit of the law.

So I've still received no phone calls or verbal inquiries about this issue (even though I have spoken with customer service several times to request such things as copies of past statements), but I have received a few noncertified letters and emails stating that "As of today, your payment for $X has not been received" without any reference to which account or what purpose the requested payment is for.

Then, finally, two days ago the negative balance in the account was zeroed out with a line item that says "charge off" even though as of today there has been nothing reported to my credit report nor even a single soft inquiry from this institution nor any collection agency.

I was waiting to pay this back until after I saw how it would be reported to the IRS which would affect whether I should pay with taxable or IRA monies and possibly give me an opportunity to effectively increase my IRA contributions, but it appears that the debt has been forgiven before I had the chance since the brokerage knows they have no legal right to collect and that trying to collect might even incur much greater losses for them by risking their status as a government certified IRA custodian. Oh well, better luck next time, suckers.

Thanks for the update. The only thing better than free money is tax-free (Roth) free money.

"Charge off" is an accounting term. They are required to notate the account as such after a specific period of time.

It has nothing to do with how collectible they feel the account is, or whether or not they intend to pursue other action.

USFinA said:   So I've still received no phone calls or verbal inquiries about this issue (even though I have spoken with customer service several times to request such things as copies of past statements), but I have received a few noncertified letters and emails stating that "As of today, your payment for $X has not been received" without any reference to which account or what purpose the requested payment is for.

Then, finally, two days ago the negative balance in the account was zeroed out with a line item that says "charge off" even though as of today there has been nothing reported to my credit report nor even a single soft inquiry from this institution nor any collection agency.

I was waiting to pay this back until after I saw how it would be reported to the IRS which would affect whether I should pay with taxable or IRA monies and possibly give me an opportunity to effectively increase my IRA contributions, but it appears that the debt has been forgiven before I had the chance since the brokerage knows they have no legal right to collect and that trying to collect might even incur much greater losses for them by risking their status as a government certified IRA custodian. Oh well, better luck next time, suckers.


Quoted for posterity. If you are dumb enough to think a charge off notation means they aren't coming after the money, I can't wait until the debt collection and court notices start showing up. And they will start showing up, now that its been formally charged off - that means the next step is to sell it to a collector who will ding your credit and start sending the collection letters.

However, I have a feeling you won't update the thread when that starts happening...

barbcole said:   "Charge off" is an accounting term. They are required to notate the account as such after a specific period of time.

It has nothing to do with how collectible they feel the account is, or whether or not they intend to pursue other action.


Exactly: it is the fact that they still haven't made hardly any attempt to collect, even after a period of time has elapsed that is long enough to be considered noteworthy for their accounting purposes, that indicates they feel the account isn't collectable.

In other words, it is their actions which indicate the direction of their intent while the notations independently indicate the magnitude of their conviction: so far they have been apathetic and, with the charge-off, that same prior apathy has now been magnified to an intensity of more official entrenchment.

magika said:   
Quoted for posterity. If you are dumb enough to think a charge off notation means they aren't coming after the money, I can't wait until the debt collection and court notices start showing up. And they will start showing up, now that its been formally charged off - that means the next step is to sell it to a collector who will ding your credit and start sending the collection letters.

However, I have a feeling you won't update the thread when that starts happening...


So are you saying I need to continue rubbing it in because, otherwise, you'll interpret the absence of further gloating from me as a sign that your foolish decrees of impending doom have come to fruition? If so then I will happily oblige because I assure you that there will not be any dings on my credit nor will there be any court notices.

The only thing better than tax free money is tax free money that someone who repeatedly insults my intelligence is jealous of.

I have now received the 5498 tax documents for the affected accounts which indicate that the IRS has been officially notified that:
1. There is NO negative balance in my IRA.
2. There has been NO prohibited transaction and, therefore, no loan or cash liability between the custodian and my IRA nor between my IRA and myself.
3. The additional cash credited via the "charge-off" has been reported just like any other tax sheltered investment gain (ie not at all).

Moreover, according to the internal revenue code, since it is now 2013 if the custodian tries to correct or amend these documents going forward they would now owe a tax penalty of 100% of the prohibited amount; So even if they were able to collect the overpayment as a "debt" they would not be able to recover their losses because, under that interpretation, they would have to pay every cent they collected directly to the IRS in addition to admitting that they were guilty of tax evasion by intentionally filing form 5498s which they believed to be false.

Finally, I have again checked all my credit reports and not only have there not been any debts reported, but there haven't even been any hard or soft inquiries from the custodian or its affiliates nor have I had any difficulty opening new brokerage accounts (including margin accounts) at other brokerages this month.

However, the bad news is that I found this similar incident from 1999 which was not resolved in favor of the investor:
http://www.seclaw.com/docs/sac/customerfidelityacaterror1003.htm
But I believe the facts of my situation are significantly different because:
A. I have not received notice of any transfer "error" nor have I been asked to take any steps to correct any particular error.
B. My situation does not involve a margin account, but an IRA which a reasonable individual would not expect to be capable of generating a such liability.
C. The custodian has already filed official legal documents to a branch of the federal government which certify their acknowledgment of these differences. It will therefore, be difficult for them to argue my interpretation is not reasonable or in good faith, even if they alter their point of view at a later time.

Having read every post, even if you get away with it, you're still a thief.

Too bad you're using a troll account and/or making up everything. The beauty of it is you can just insist until the end of time that you're never dinged and can gloat how you stuck it to a corporation.

You stole money willingly, you took money that you know you don't have, and you're a thief.

If you're just trolling the heck out of fatwallet, well played, if you're for real I hope karma kicks you in the nuts.

I don't like the banks but I don't like people like you that gloat about your stealing of money. Hell you'll probably end up working for a bank some day and you'll be just another banker stealing money from others.

You do realize your actions affect the overall economy in a microscopic but very real way when they add up with every other thief's actions, your stealing of money might not mean much by itself but the economy will self correct itself as a result of it and you basically cost others money.

Enjoy being a thief and living with your smug gloating, I'll enjoy not being a thief and knowing that I'm not a douche.

USFinA said:   I have now received the 5498 tax documents for the affected accounts which indicate that the IRS has been officially notified that:
1. There is NO negative balance in my IRA.
2. There has been NO prohibited transaction and, therefore, no loan or cash liability between the custodian and my IRA nor between my IRA and myself.
3. The additional cash credited via the "charge-off" has been reported just like any other tax sheltered investment gain (ie not at all).

Moreover, according to the internal revenue code, since it is now 2013 if the custodian tries to correct or amend these documents going forward they would now owe a tax penalty of 100% of the prohibited amount; So even if they were able to collect the overpayment as a "debt" they would not be able to recover their losses because, under that interpretation, they would have to pay every cent they collected directly to the IRS in addition to admitting that they were guilty of tax evasion by intentionally filing form 5498s which they believed to be false.

Finally, I have again checked all my credit reports and not only have there not been any debts reported, but there haven't even been any hard or soft inquiries from the custodian or its affiliates nor have I had any difficulty opening new brokerage accounts (including margin accounts) at other brokerages this month.

However, the bad news is that I found this similar incident from 1999 which was not resolved in favor of the investor:
http://www.seclaw.com/docs/sac/customerfidelityacaterror1003.htm
But I believe the facts of my situation are significantly different because:
A. I have not received notice of any transfer "error" nor have I been asked to take any steps to correct any particular error.
B. My situation does not involve a margin account, but an IRA which a reasonable individual would not expect to be capable of generating a such liability.
C. The custodian has already filed official legal documents to a branch of the federal government which certify their acknowledgment of these differences. It will therefore, be difficult for them to argue my interpretation is not reasonable or in good faith, even if they alter their point of view at a later time.


Good for you. Enjoy. /s

Well played!

USFinA said:   I have now received the 5498 tax documents for the affected accounts which indicate that the IRS has been officially notified that:
1. There is NO negative balance in my IRA.
2. There has been NO prohibited transaction and, therefore, no loan or cash liability between the custodian and my IRA nor between my IRA and myself.
3. The additional cash credited via the "charge-off" has been reported just like any other tax sheltered investment gain (ie not at all).

Moreover, according to the internal revenue code, since it is now 2013 if the custodian tries to correct or amend these documents going forward they would now owe a tax penalty of 100% of the prohibited amount; So even if they were able to collect the overpayment as a "debt" they would not be able to recover their losses because, under that interpretation, they would have to pay every cent they collected directly to the IRS in addition to admitting that they were guilty of tax evasion by intentionally filing form 5498s which they believed to be false.

I think you can get corrected 5498's issued through mid-2013 for the prior year, but I'm not exactly sure what the cutoff is and I couldn't easily find it.

However, the bad news is that I found this similar incident from 1999 which was not resolved in favor of the investor:
http://www.seclaw.com/docs/sac/customerfidelityacaterror1003.htm
But I believe the facts of my situation are significantly different because:
A. I have not received notice of any transfer "error" nor have I been asked to take any steps to correct any particular error.
B. My situation does not involve a margin account, but an IRA which a reasonable individual would not expect to be capable of generating a such liability.
C. The custodian has already filed official legal documents to a branch of the federal government which certify their acknowledgment of these differences. It will therefore, be difficult for them to argue my interpretation is not reasonable or in good faith, even if they alter their point of view at a later time.

In that case, the source brokerage basically sent too many assets (due to a mixup similar to yours), asked for them back, and the individual refused. Somewhat surprising that the arbitration panel awarded the brokerage not only the excess funds transferred (seems fair enough), but also for market fluctuation losses and margin interest at 9% for a number of years as well until the funds were returned. But the FINRA arbitration system is pretty heavily rigged towards their repeat customers (i.e the brokers), and the customer and his lawyer getting caught and subsequently sanctioned for lying about things must not have helped their cause either.

xerty said:   
I think you can get corrected 5498's issued through mid-2013 for the prior year, but I'm not exactly sure what the cutoff is and I couldn't easily find it.


Yes this is true. However:
1. In the absence of new information or account activity what legitimate reason would the custodian have to submit a correction? I don't think the IRS would have a favorable view if the reason is that the custodian intentionally issued a false 5498 in order to see if they could get away with quietly evading the 100% tax liability (for which the custodian is still liable if the prohibited transaction is not reversed by the end of 2012, even if an amended 5498 is issued by mid-2013).
2. The fact that the 5498 was already furnished gives me a basis for disputing any "corrections" with the IRS by claiming that it was correct the first time and it remains correct because there has, in fact, been no new information or account activity.
3. In the event this is brought to arbitration, the fact that the 5498 was already furnished lends credibility to my defense because it proves that even the custodian itself believed through the end of 2012 that these were legitimate investment gains to which I was entitled and nothing has happened in 2013 to change that...so to claw it back in arbitration would be like a credit card company trying to claw back a cashed rewards check after signing a letter acknowledging its legitimacy and after the funds have already been invested elsewhere by the recipient: tenuous.

xerty said:   
In that case, the source brokerage basically sent too many assets (due to a mixup similar to yours), asked for them back, and the individual refused. Somewhat surprising that the arbitration panel awarded the brokerage not only the excess funds transferred (seems fair enough), but also for market fluctuation losses and margin interest at 9% for a number of years as well until the funds were returned. But the FINRA arbitration system is pretty heavily rigged towards their repeat customers (i.e the brokers), and the customer and his lawyer getting caught and subsequently sanctioned for lying about things must not have helped their cause either.


It is surprising, but that individual also signed a margin agreement (no doubt swearing to his sophistication and liability for margin interest, among other things) whereas I'm just a helpless dumb dumb that pressed the wrong button on my government-sanitized nanny-approved retirement account. Also, with me the assets were just cash, so I couldn't be hit with market fluctuation losses even in the worst case.

technolich said:   You do realize your actions affect the overall economy in a microscopic but very real way when they add up with every other thief's actions, your stealing of money might not mean much by itself but the economy will self correct itself as a result of it and you basically cost others money.

Enjoy being a thief and living with your smug gloating, I'll enjoy not being a thief and knowing that I'm not a douche.


I wouldn't do it if it DIDN'T affect the economy and cost others money. I'm motivated by justice, not greed, because the criminal bankers need to be punished and I would like every good citizen to follow my example by using every legal means possible to punish the criminal bankers just like me. So my advice to you is to man up, stop worrying about who thinks you're a douche, and start whooping some financial industry arse!

The Jerk Store called, they're running out of YOU!

Curious if you received a 1099-R from the destination broker?

The 'real' 5498 form listing all contributions isn't issued until april/march, since people can make contributions for prior year up until tax time. The one you got now (I'm actually surprised you got one), would just be to list the year end fair market value.

I'm also curious to see what kind of 1099-r you get from the 'destination' brokerage, and how they code the 'rollover'.

And I forgot, in all this mess, did the check go back into your Roth IRA in the source brokerage, i.e. your IRA balance doubled?

markkundinger said:   The 'real' 5498 form listing all contributions isn't issued until april/march, since people can make contributions for prior year up until tax time. The one you got now (I'm actually surprised you got one), would just be to list the year end fair market value.

I'm also curious to see what kind of 1099-r you get from the 'destination' brokerage, and how they code the 'rollover'.

And I forgot, in all this mess, did the check go back into your Roth IRA in the source brokerage, i.e. your IRA balance doubled?


Yes the source account has doubled in value and has had that year end fair market value reported on the 5498 along with the amount of the 60-day "rollover contribution" which was deposited via check. That being said, after looking more carefully at what I have it turns out you are right that I haven't yet received the official 5498 from the destination brokerage. What I have received is:
1. An official 5498 for the source account.
2. An official 1099-R for the destination account.
3. A year-end statement for the destination account which contains a page with all the information that would be on the 5498 ($0 in contributions for 2012 and $0 for the 2012 year end fair market value) and a footnote that "the Year-End Plan Value represents the valuation we must furnish to you and the Internal Revenue Service as part of the IRS Form 5498 reporting requirements"...but I was mistaken in that this page does not claim to be the official 5498 itself.

However, even just these two official forms is all that is needed to demonstrate that the IRS has received official notice of all relevant information to date because:
A. The indirect (60-day) rollover is reported as expected with code J on the 1099-R of the destination account and as a "rollover contribution" on the 5498 of the source account.
B. The direct trustee-to-trustee transfer is, also as expected, not reported at all because trustee-to-trustee transfers are exempt from reporting by Internal Revenue Code section 408 (d)(2)(A) - "all individual retirement plans shall be treated as 1 contract,"
C. The year end fair market value is reported as doubled on the 5498 of the source account.
...so the official 5498 for the destination account isn't particularly relevant because a prohibited transaction (and a disqualified IRA) would be reported as a distribution on 1099-R, not as a contribution on form 5498, and although it is true that the year end balance of $0 has yet to be officially reported to the IRS, it would be a boldfaced lie for the official 5498 of the destination account to report anything other than $0 because that was, in fact, the balance listed on the statement for 12/31/2012 regardless of what corrections or transactions might have occurred before or after that date.

Jahlapenoez said:   Curious if you received a 1099-R from the destination broker?

Yes the 1099-R from the destination broker reports the amount of the indirect 60-day rollover with code J and does not report the amount of the duplicate rescinded/reversed trustee-to-trustee transfer at all. Also, the 5498 from the source brokerage corroborates this information with the same amount listed under box 2, "rollover contributions".



Disclaimer: By providing links to other sites, FatWallet.com does not guarantee, approve or endorse the information or products available at these sites, nor does a link indicate any association with or endorsement by the linked site to FatWallet.com.

Thanks for visiting FatWallet.com. Join for free to remove this ad.

TRUSTe online privacy certification

While FatWallet makes every effort to post correct information, offers are subject to change without notice.
Some exclusions may apply based upon merchant policies.
© 1999-2014