Do I legally have to claim 1099R money as income on my tax return? 1 Answers as of January 27, 2011

I received a 1099R in box 1. which has $31,000.00 and the same in box 2a. I paid taxes of $3110.93. Do I have to claim box 1 as income on my tax return? I also split the money with my two sisters after receiving the money.

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Steven J. Fromm
Steven J. Fromm | Steven J. Fromm & Associates, P.C.
Yes you must report all of this income on your income tax return. Obviously, the taxes withheld will offset your total tax liability. The fact that you gave your two sisters the money has no impact on your income taxes. As far as filing a gift tax return, Form 709, if you only made gifts to each of them of less than $13,000, then you are not required to file a gift tax return.
Answer Applies to: Pennsylvania
Replied: 1/27/2011
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