Puerto Rico Publishes Tax Year 2018 Form 480.7

October 26, 2018 Tom Hospod

The Treasury of Puerto Rico has released Form 480.7, Informative Return - Individual Retirement Account.

Form 480.7 must be prepared for each owner or beneficiary of an Individual Retirement Account (IRA) who, during Tax Year 2018, received a distribution or transfer that meets the requirements of Section 1081.02 of the Puerto Rico Internal Revenue Code of 2011, as amended. It must also report any contribution, including electronic rollover contributions, made during the year to an IRA. In addition, this form will be used to report Eligible Distributions of an IRA on a Non Deductible IRA made for Reason of Extreme Economic Emergency Due to Hurricane María, according to the provisions of Administrative Determinations No. 17-29, 18-02, and 18-13.

The following revisions have been incorporated into these forms and their instructions:

Changes to 480.7

  • Box G under Distributions now requires a Total on Line 4 (Sum of lines G1 – G3)
  • Box K under Distributions now requires a Total on Line 4 (Sum of lines K1 – K3)
  • Additional Administrative Determinations relative to Hurricane Maria relief (AD 18-02); (AD 18-13)
  • Box 10 Instructions: Applies to withholding on Eligible Distributions made between January 1, 2018 and November 30, 2018
    • For Eligible Distributions made between July 1 and July 30, 2018, for which tax withheld was other than 10%, this box must include the total amount withheld at source at the moment of distribution – in those cases, this box must include any penalty over the Eligible Distribution withheld under the Code
  • Eligible Distributions can now come from a Non-Deductible IRA
  • Eligible Period extended to January 1, 2018 through November 30, 2018 for TY 2018
  • If a sworn statement is not submitted by an Eligible Individual to FI as required under the Administrative Determinations, or if distribution not made during Eligible Period, the total distribution will not be considered an Eligible Distribution, and must not be recorded in Box 12K. In these cases, the distribution must be reported in the corresponding box
  • Box 12(K)(3): Prepayment of special tax changed from “5%, 8%, 0r 15%” to “5%, 8%, or 10%

About the Author

Tom Hospod

Tom Hospod is a member of the Tax Research Team for the Direct Tax division at Sovos Compliance, where his main areas of focus are Tax Withholding and Automatic Exchange of Information (AEOI). Prior to Sovos, Tom worked as a legislative aide in the Massachusetts House of Representatives. He also has experience in securities law—focusing on broker-dealer disputes and representing clients in FINRA arbitration. Tom is a member of the Massachusetts Bar, earned his B.A. from Boston College and his J.D. from the University of Miami.

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