What is the difference between a reportable and taxable distribuition?
• The IRS requires certain transactions to be reported to them, although the transaction may not be taxable. A direct transfer is an example of such a transaction. • The IRS has designated certain transactions as both reportable and taxable; there are tax consequences for the client. These may include, but are not limited to, a distribution (full or partial), beneficiary payout, or a Roth IRA conversion. • A transaction can be reportable and not taxable; however, a transaction that is taxable is always reportable.
