IRS ANNOUNCES CORRECTION TO ANNOUNCEMENT 98-106.

DEC. 21, 1998

Announcement 98-113; 1998-2 C.B. 793

DATED DEC. 21, 1998

DOCUMENT ATTRIBUTES

Citations: Announcement 98-113; 1998-2 C.B. 793

Announcement 98-113

Purpose The purpose of this announcement is to advise

payers making distributions from Roth IRAs of

changes to the distributions codes on Form 1099-

R, Distributions From Pensions, Annuities,

Retirement or Profit-Sharing Plans, IRAs,

Insurance Contracts, etc.

Background The Internal Revenue Service Restructuring and

Reform Act of 1998 (Public Law 105-206) amended

Internal Revenue Code section 408A, dealing with

Roth IRAs. Because of these amendments, the

Service has concluded that code K, "Distribution

from a 1998 Roth conversion IRA in the first 5

years," on the 1998 Form 1099-R may no longer

serve its intended purpose. In addition, a new

code for recharacterizations is needed.

1998 Form 1099-R Code K, to be used in box 7 on the 1998 Form

1099-R, is now optional. Payers may choose to use

Code J in box 7 for all distributions from a Roth

IRA or Roth conversion IRA. They will meet the

requirements of Q/A-B-2 of Notice 98-49, 1998-38

I.R.B. 5, if they use Code J instead of Code K.

1999 Form 1099-R Code K will be eliminated on the 1999 Form 1099-

R. Code J will be changed to "Distribution from a

Roth IRA." Use Code J when reporting any

distribution from a Roth IRA or Roth conversion

IRA. New Code R, "Recharacterized IRA

contribution," will be added to identify a

recharacterization of an IRA contribution.

DOCUMENT ATTRIBUTES

Copy RID