ROTH IRA mistake (or resentment) on the banks side

[anvancamp]

My fiancee and I combined our bank accounts in october. She had everything in Wells Fargo and we opened all new accounts at chase. (because Wells Fargo is absolutely terrible). Anyway, she had a ROTH IRA and we told the banker at WF that we wanted to transfer the IRA to chase and the banker told us that the proper way to do that is to close down the account and give us a cashiers check for the amount. We get to Chase within an hour and they tell us that because the check was in our hands that we are responsible for taxes and fees, But they also said that as long as we have proof of deposit being the exact same amount as the redistribution that we should be ok. Then we get a 1099-r from Wells Fargo this week. SO Wells Fargo completely screwed us into the ground. Is there anything we can do to get Wells Fargo to fix their mistake (or blatant screwing)? Is there anything we can do to ease the pain of the taxes and fees? Is there anything we can do period? Any help would be greatly appreciated. Thank You.

[sblatner]

Does the 1099-R have a box checked that says taxable amount (or something like that)? I think just because you get a 1099-R, that doesn't mean it is taxable.

What are her gains on the Roth? If there are taxes to be paid, only the gains are taxable.

I really think you are okay.

[anvancamp]

Yes box 2a taxable amount has a box with an x through it. It doesn't say anything about gains on it the only box with an acual number in it is box 1 with the total of the account. We are having a hard time even understanding what the 1099 even means.

[Petunia 100]

Unfortunately, you got some bad advice at Wells Fargo. The best way to transfer an IRA from one custodian to another is to ask the new custodian to handle it. You don't want to ever take possession of the money yourself.

If you do take possession of the money yourself, you have 60 days to get ALL of the money (even if they have withheld some for taxes) into a new IRA. Did you do that? If you did, you are OK. (Wells Fargo didn't really make a mistake. They don't know what you did with the money after they gave it to you.)

[anvancamp]

The paperwork they gave us with the cashiers check says federal taxes weren't witheld.

[Petunia 100]

The paperwork they gave us with the cashiers check says federal taxes weren't witheld.

Did you deposit the entire check into the new IRA?

[anvancamp]

We have the check stub and the deposit receipt for the exact same amount. So yes every penny of the check went into the new account

[Petunia 100]

We have the check stub and the deposit receipt for the exact same amount. So yes every penny of the check went into the new account

Then you're fine.

[MonkeyMama]

What is the code in Box 7? That is what is important. A 1099-R has to be issued with any retirement distribution.

I presume since they handed you a check that they treated it like a taxable distribution (Code 1). Code G is good - just means it is rolled over and not taxable.

If the code is wrong (1), file it as a rollover on your tax return (Code G). The IRS will probably match 1099s to tax returns in another 12+ months, and will send you a notice. Send them the paperwork to show you rolled it over the same day. Is no biggie. But just FYI to hang onto all the paperwork - it may be a while. The IRS usually matches things the following year after you file.

[anvancamp]

the code is J for early distribution.

[anvancamp]

What is the code in Box 7? That is what is important. A 1099-R has to be issued with any retirement distribution.

I presume since they handed you a check that they treated it like a taxable distribution (Code 1). Code G is good - just means it is rolled over and not taxable.

If the code is wrong (1), file it as a rollover on your tax return (Code G). The IRS will probably match 1099s to tax returns in another 12+ months, and will send you a notice. Send them the paperwork to show you rolled it over the same day. Is no biggie. But just FYI to hang onto all the paperwork - it may be a while. The IRS usually matches things the following year after you file.

The code is J for early distrobution.

[MonkeyMama]

The code is J for early distrobution.

Okay - same advice applies. Just treat it as a rollover on your tax return. Respond to IRS when they ask you why you did not report it as an early distribution. They will understand.

[rennigade]

I have wells fargo and have never had an issue.

Sounds like 1 or 2 employees that work at wells fargo were terrible, not the company itself.


Reminds me of my friends who had bank of american in the past. They were always overdrawing so boa would charge them a hefty penalty for that. They would get so pissed off at the bank. My friends were just irresponsible yet they wanted to put the blame on someone else.

I personally trust very few people. I definitely wouldnt have trusted some jabroni working at a bank trying to handle ira's. I hardly trust them depositing a check into my account.

[jpg7n16]

Bank employees are not tax advisors. You really shouldn't expect to get terrific tax advice from your teller/personal banker.

If you'd like to continue hating banks for their bad tax advice, keep in mind that the Chase rep was wrong too. If the Chase rep gave you the right info in the first place, you wouldn't have been through this anxiety.

There are two ways to transfer an IRA:
-Direct transfer straight from one institution to the other
-Indirect transfer (aka 60 day rollover), where they give you the funds and you put it back into an IRA within 60 days.

The WF rep didn't know about option 1, and the Chase rep didn't know about option 2.


I know you got a 1099-R, and you should - you took money out of the IRA. You will also get a 5498 from Chase to document the transfer (putting it back in an IRA). The two documents will offset your tax liability and you won't owe anything.

[anvancamp]

We wouldn't have been changing banks if it wasn't for their policies I'm not a banker, so I listen to one that is. I'm not a mechanic, so I listen to someone who is. I'm an hvac tech so if I'm working on your ac and you don't know anything about acs you should listen to me. So if i'm leaving a company or not the employees or reprisentatives should still be professional. If you don't trust the ac advice I give, call someone else, I don't care, but if I blew a hole in your ac with a hammer before I left I'd be in jail. I can still be pissed off at Wells Fargo and I well settle that at a differnt day and time. But what's done is done and I need to know how to handle it.