Tax withholdings on an IRA


R

Ron Redfield

I was wondering if anyone knew of a tax form or method of
collecting tax back when it was withheld from an IRA
investment.

1. Foreign tax withholding in an IRA. Is there a form to
help you recoup.

2. There is a federal form 2439 that I think accomplishes
the following: A public company sells a capital gain
investment. the corporation pays the tax. The investor is
instructed to file form 2439. This will list an amount of
gain, which you report on form 1040 sch D, and an amount of
tax paid, which you report on line whatever on form 1040
page 2 in the same way ES tax payments are reported. If
this is the case, is there a method for IRA's.

signed,
a former tax practioner who is now an investment manager
 
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P

Phil Marti

I was wondering if anyone knew of a tax form or method of
collecting tax back when it was withheld from an IRA
investment.

1. Foreign tax withholding in an IRA. Is there a form to
help you recoup.

2. There is a federal form 2439 that I think accomplishes
the following: A public company sells a capital gain
investment. the corporation pays the tax. The investor is
instructed to file form 2439. This will list an amount of
gain, which you report on form 1040 sch D, and an amount of
tax paid, which you report on line whatever on form 1040
page 2 in the same way ES tax payments are reported. If
this is the case, is there a method for IRA's.
You can't recover these. IRAs are tax-exempt entities, so
they have no tax to apply credits to. This is a distinct
disincentive to holding such investments in IRAs.

Phil Marti
Clarksburg, MD
 
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R

Ron Redfield

thanks for your response. I think that an IRA or tax
deferred account can have a form 990T filed. This in turn
ties into the Form 2439. I believe that the filer of the
990t, which might be the custodian, then can deposit the
money collected directly into the tax deferred account.

in this situation, the corporation paid the tax, eventhough
the income is passed through to the shareholder. I have a
letter from the company when this occurred in 1999, and they
instructed tax deferred accounts to file form 990T as well
as form 2439. The funds never hit the participants hands
and are deposited directly from the source or a conduit into
the tax deferred account.

You wrote, "This is a distinct disincentive to holding such
investments in IRAs." Even if not recoverable, I believe
this investment is worthwhile to a long term holder, even in
a tax deferred account.

The above is being researched, any other info would be appreciated.

thanks

ron
 
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