Instructions For Form 5329 Additional Taxes On Qualified Plans And Other Tax-Favored Accounts

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For IRAs, treat all taxable alimony

A distribution of excess deferrals;

contributions of $2,000 for 2000 and

received under a decree of divorce or

and

2001. You did not make any Roth IRA

•

separate maintenance as

A distribution from an eligible

conversions or contributions for 2002

compensation.

governmental section 457 deferred

through 2004, or take any Roth IRA

compensation plan to the extent the

distributions before 2004. On July 9,

Compensation does not include any

distribution is not attributable to an

2004, at age 53, you took a $33,000

amounts received as a pension or

amount transferred from a qualified

distribution from your Roth IRA. Your

annuity and does not include any

retirement plan (excluding an eligible

2004 Form 8606 shows $33,000 on line

amount received as deferred

section 457 deferred compensation

19; $29,000 on line 23 ($33,000 minus

compensation.

plan).

$4,000 for your contributions) and $0

Taxable compensation is your

on line 25 ($29,000 minus your basis in

See the instructions for line 2 on this

compensation that is included in gross

Roth IRA conversions of $30,000).

page for other distributions that are not

income reduced by any deductions on

First, $4,000 of the $33,000 is allocated

subject to the tax.

Form 1040, lines 30 and 32, but not by

to your 2004 Form 8606, line 22; then

any loss from self-employment.

Line 1

$15,000 to your 2000 Form 8606 line

16; $5,000 to your 2000 Form 8606,

Additional Information

Enter the amount of early distributions

line 15; and $7,000 to your 2001 Form

included in income that you received

See Pub. 590, Pub. 560, Retirement

from:

8606, line 18. The remaining $2,000 is

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Plans for Small Business, Pub. 575,

allocated to the $3,000 on your 2001

A qualified retirement plan, including

Pension and Annuity Income, and Pub.

earnings on withdrawn excess

Form 8606, line 17. On line 1, enter

970, Tax Benefits for Education.

contributions to your IRAs included in

$22,000 ($15,000 plus the $7,000 that

income in 2004, or

was allocated to your 2001 Form 8606,

•

A modified endowment contract

line 18). If you take a Roth IRA

Specific Instructions

entered into after June 20, 1988.

distribution in 2005, the first $1,000 will

be allocated to the $1,000 remaining

Certain prohibited transactions, such

Joint returns. If both you and your

from your 2001 Form 8606, line 17, and

as borrowing from your IRA or pledging

spouse are required to file Form 5329,

will not be subject to the additional tax

your IRA assets as security for a loan,

complete a separate form for each of

on early distributions.

are considered to be distributions and

you. Include the combined tax on Form

may also cause you to owe the

1040, line 59.

Additional Information. For more

additional tax on early distributions. See

Amended return. If you are filing an

details, see Are Distributions Taxable?

Pub. 590 for details.

amended 2004 Form 5329, check the

in Pub. 590.

Exception for Roth IRA

box at the top of page 1 of the form. Do

not use the 2004 Form 5329 to amend

Distributions

Line 2

your return for any other year. Instead,

If you received an early distribution

The additional tax on early distributions

see Prior tax years on page 1.

from a Roth IRA, first allocate the

does not apply to the distributions

amount on your 2004 Form 8606, line

described below. Enter on line 2 the

Part I—Additional Tax

19, in the order shown, to the amounts

amount that can be excluded. In the

on the lines listed below (to the extent a

on Early Distributions

space provided, enter the applicable

prior year distribution was not allocable

exception number (01-11).

In general, if you receive an early

to the amount). Then, include on line 1

distribution (including an involuntary

of Form 5329 the amount from your

cashout) from an IRA, other qualified

2004 Form 8606, line 25, plus the

retirement plan, or modified endowment

No. Exception

amount, if any, allocated to the amount

contract, the part of the distribution

on your 2004 Form 8606, line 20

01 Qualified retirement plan distributions

included in income generally is subject

(include this amount, if any, on Form

due to separation from service in or after

to an additional 10% tax. But see

5329, line 2, and enter the exception

the year you reach age 55 (does not

Exception for Roth IRA Distributions on

number 09), or 2000 Form 8606, line

apply to IRAs).

this page.

16, or 2001, 2002, 2003, or 2004 Form

02 Distributions made as part of a series of

The additional tax on early

8606, line 18.

substantially equal periodic payments

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distributions does not apply to:

Your 2004 Form 8606, line 20.

(made at least annually) for your life (or

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A distribution from a traditional or

Your 2004 Form 8606, line 22.

life expectancy) or the joint lives (or joint

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SIMPLE IRA that was converted to a

Your 2000 Form 8606, line 16.

life expectancies) of you and your

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Roth IRA;

Your 2000 Form 8606, line 15.

designated beneficiary (if from an

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A distribution of certain excess IRA

Your 2001 Form 8606, line 18.

employer plan, payments must begin

•

contributions (see the instructions for

Your 2001 Form 8606, line 17.

after separation from service).

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lines 15 and 23);

Your 2002 Form 8606, line 18.

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03 Distributions due to total and permanent

Your 2002 Form 8606, line 17.

Note. Any related earnings withdrawn

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disability.

Your 2003 Form 8606, line 18.

with excess contributions are subject to

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04 Distributions due to death (does not

Your 2003 Form 8606, line 17.

the additional tax on early distributions

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apply to modified endowment contracts).

Your 2004 Form 8606, line 18.

if you were under age 59

at the time

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Your 2004 Form 8606, line 17.

of the distribution.

05 Qualified retirement plan distributions up

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Your 2004 Form 8606, line 25.

to (1) the amount you paid for

A distribution of excess contributions

unreimbursed medical expenses during

from a qualified cash or deferred

Example. You converted $20,000 from

the year minus (2) 7.5% of your

arrangement;

a traditional IRA to a Roth IRA in 2000

•

adjusted gross income for the year.

A distribution of excess aggregate

and converted $10,000 in 2001. Your

contributions to meet nondiscrimination

2000 Form 8606 had $5,000 on line 15

06 Qualified retirement plan distributions

requirements for employee

and $15,000 on line 16 and your 2001

made to an alternate payee under a

contributions and matching employer

Form 8606 had $3,000 on line 17 and

qualified domestic relations order (does

contributions;

$7,000 on line 18. You made Roth IRA

not apply to IRAs).

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Instructions For Form 5329 Additional Taxes On Qualified Plans And Other Tax-Favored Accounts - 2004 Page 2

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