Question

Robin received a form 1099 – are with the distribution code 7. How should Robin's distribution be treated for tax purposes?

Answer 1

A Form 1099 distribution code 7 indicates a normal distribution from a retirement account. The distribution should be treated as ordinary income for tax purposes, subject to income tax at the applicable tax rate.

Step-by-step explanation:

A Form 1099 distribution code 7 indicates a normal distribution from a retirement account.

For tax purposes, Robin's distribution should be treated as ordinary income. This means that the distribution may be subject to income tax at the applicable tax rate.

Robin may also be subject to additional penalties if the distribution is taken before the age of 59 1/2, unless certain exceptions apply.