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590, Individual Retirement

A qualified HSA funding distribution

Your 1999 Form 8606, line 15.

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Arrangements (IRAs), for details.

from an IRA (other than a SEP or

Your 2000 Form 8606, line 16.

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SIMPLE IRA). See Pub. 969 for details.

Your 2000 Form 8606, line 15.

Compensation. Compensation

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A distribution from a traditional or

includes wages, salaries, tips, bonuses,

Your 2001 Form 8606, line 18.

SIMPLE IRA that was converted to a

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and other pay you receive for services

Your 2001 Form 8606, line 17.

Roth IRA.

you perform. It also includes sales

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Your 2002 Form 8606, line 18.

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A distribution of certain excess IRA

commissions, commissions on

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Your 2002 Form 8606, line 17.

contributions (see the instructions for

insurance premiums, and pay based on

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Your 2003 Form 8606, line 18.

lines 15 and 23).

a percentage of profits. It includes net

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Your 2003 Form 8606, line 17.

earnings from self-employment, but

Note. Any related earnings withdrawn

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Your 2004 Form 8606, line 18.

only for a trade or business in which

with excess contributions are subject to

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your personal services are a material

Your 2004 Form 8606, line 17.

the additional tax on early distributions

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income-producing factor.

Your 2005 Form 8606, line 18.

if you were under age 59

at the time

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For IRAs, treat nontaxable combat

Your 2005 Form 8606, line 17.

of the distribution.

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pay and all taxable alimony received

A distribution of excess contributions

Your 2006 Form 8606, line 18.

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under a decree of divorce or separate

from a qualified cash or deferred

Your 2006 Form 8606, line 17.

maintenance as compensation.

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arrangement.

Your 2007 Form 8606, line 18.

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A distribution of excess aggregate

Compensation does not include any

Your 2007 Form 8606, line 17.

contributions to meet nondiscrimination

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amounts received as a pension or

Your 2007 Form 8606, line 25.

requirements for employee

annuity and does not include any

contributions and matching employer

Then, include on line 1 of Form 5329

amount received as deferred

contributions.

compensation.

the amount from your 2007 Form 8606,

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line 25, plus the amount, if any,

A distribution of excess deferrals.

Taxable compensation is your

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allocated to the amount on your 2007

A distribution from an eligible

compensation that is included in gross

Form 8606, line 20, and the amount, if

governmental section 457 deferred

income reduced by any deductions on

any, allocated to line 18 of your 2003

compensation plan to the extent the

Form 1040, lines 27 and 28, or on Form

through 2007 Forms 8606. Also include

distribution is not attributable to an

1040NR, line 27, but not by any loss

the amount, if any, from your 2007

amount transferred from a qualified

from self-employment.

Form 8606, line 20, on Form 5329, line

retirement plan (excluding an eligible

2, and enter exception number 09.

section 457 deferred compensation

Additional Information

plan).

Example. You converted $20,000

See Pub. 590; Pub. 560, Retirement

from a traditional IRA to a Roth IRA in

See the instructions for line 2 on

Plans for Small Business; Pub. 575,

2003 and converted $10,000 in 2004.

page 3 for other distributions that are

Pension and Annuity Income; Pub. 970,

Your 2003 Form 8606 had $5,000 on

not subject to the tax.

Tax Benefits for Education; and Pub.

line 17 and $15,000 on line 18 and your

4492, Information for Taxpayers

2004 Form 8606 had $3,000 on line 17

Line 1

Affected by Hurricanes Katrina, Rita,

and $7,000 on line 18. You made Roth

and Wilma.

Enter the amount of early distributions

IRA contributions of $2,000 for 2003

included in income that you received

and 2004. You did not make any Roth

from:

IRA conversions or contributions for

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Specific Instructions

A qualified retirement plan, including

2005 through 2007, or take any Roth

earnings on withdrawn excess

IRA distributions before 2007. On July

Joint returns. If both you and your

contributions to your IRAs included in

9, 2007, at age 53, you took a $33,000

spouse are required to file Form 5329,

income in 2007, or

distribution from your Roth IRA. Your

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complete a separate form for each of

A modified endowment contract

2007 Form 8606 shows $33,000 on line

you. Include the combined tax on Form

entered into after June 20, 1988.

19; $29,000 on line 23 ($33,000 minus

1040, line 60.

$4,000 for your contributions on line 22)

Certain prohibited transactions, such

and $0 on line 25 ($29,000 minus your

Amended returns. If you are filing an

as borrowing from your IRA or pledging

amended 2007 Form 5329, check the

basis in Roth IRA conversions of

your IRA assets as security for a loan,

box at the top of page 1 of the form. Do

$30,000). First, $4,000 of the $33,000

are considered to be distributions and

not use the 2007 Form 5329 to amend

is allocated to your 2007 Form 8606,

may also cause you to owe the

line 22; then $15,000 to your 2003

your return for any other year. Instead,

additional tax on early distributions. See

see Prior tax years on page 1.

Form 8606, line 18; $5,000 to your

Pub. 590 for details.

2003 Form 8606, line 17; and $7,000 to

Part I—Additional Tax

your 2004 Form 8606, line 18. The

Exception for Roth IRA

remaining $2,000 is allocated to the

Distributions

on Early Distributions

$3,000 on your 2004 Form 8606, line

If you received an early distribution

17. On line 1, enter $22,000 ($15,000

In general, if you receive an early

from a Roth IRA, first allocate the

allocated to your 2003 Form 8606, line

distribution (including an involuntary

amount on your 2007 Form 8606, line

18, plus the $7,000 that was allocated

cashout) from an IRA, other qualified

19, in the order shown, to the amounts

to your 2004 Form 8606, line 18). If you

retirement plan, or modified endowment

on the lines listed below (to the extent a

take a Roth IRA distribution in 2008,

contract, the part of the distribution

prior year distribution was not allocable

the first $1,000 will be allocated to the

included in income generally is subject

to the amount).

$1,000 remaining from your 2004 Form

to an additional 10% tax. But see

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Your 2007 Form 8606, line 20.

8606, line 17, and will not be subject to

Exception for Roth IRA Distributions on

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the additional tax on early distributions.

this page.

Your 2007 Form 8606, line 22.

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Your 1998 Form 8606, line 16.

The additional tax on early

Additional information. For more

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Your 1998 Form 8606, line 15.

distributions does not apply to any of

details, see Are Distributions Taxable?

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Your 1999 Form 8606, line 16.

the following:

in Pub. 590.

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Instructions For Form 5329 - Additional Taxes On Qualified Plans And Other Tax-Favored Accounts - 2007 Page 2

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