Registered: Feb 2004
Local time: 11:45 PM
In the beginning of 2003, my mom went to some tax planning seminar, and they told her she could still put money into an IRA for 2002. My mom went to her brokerage and told them to put $3500 into her IRA.
The put $3500 into her traditional IRA, but my mom makes too much money to contribute to her trad. IRA. We called her brokerage and had them take the money out of the traditional and put it into her Roth IRA.
The 2002 1099-int never displayed the transaction with the traditional IRA, and we never deducted anythign for it becuase the money did not stay in thew account.
On the 2003 for 1099-INT, they are now claiming we withdrew $3500 from the traditional IRA.
Are we supposed to pay taxes on this money? After all, we never deducted it before? Also, do I have toi worry about her 10% penalty?
Is there an IRS form I can use to disclose this situation?