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The IRA 10% Penalty

2019 – 02/08 Generally, a 10% penalty is imposed on distributions before age 59½ from an IRA if they aren’t a qualified rollover. Exceptions exist, such as when a taxpayer is disabled. In one case, the IRS denied a claim that a distribution was a nontaxable rollover and imposed the 10% penalty. The U.S. Tax Court agreed, noting that the taxpayer said he used the funds to pay medical bills, but failed to support his claim. The court didn’t dispute that the taxpayer had a serious condition. But it hadn’t prevented him from working full-time. (TC Summary Op 2019-1)

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©2019 Bland Garvey CPA