8870 Form 2024

8870 Form: What You Should Know

A benefit is one that benefits an individual and which a taxpayer may be liable for. Note: When a participant receives a  participation payment or a cash bonus, the Form 8802  that the participant must file with the IRS will already include a Form 8758, Payment Information  Receivable from a Benefit. This amount will be reported on Form 8258, Part  (i). If it is not possible for you to complete Part (i) or (ii) of Form 8258 on your  self with  a separate Form 8870, report Part (iii) of Form 8870, in lieu of Part (i) or (ii) of Form 8258,  including, for a particular  participant, the  participant's gross annual gross income. Form 8870 is used to report information regarding the receipt, ownership, and value of taxable benefits from certain  contracts. The benefit is an amount that is paid or payable from an annuity, profit-sharing or stock bonus plan, or deferred profit-sharing or stock bonus plan to a specific participant or to other participants, including any trust, corporation, or limited liability company. An organization may own any of these contracts and must include their ownership and value in its income on Form 8710. When a participant has transferred any of his or her ownership and value of the contract to the organization, the transaction must not be recorded on Form 8870. The transaction must be reported on Form 8758, Payment Information Receivable from a Benefit. The participant must also report this transaction on the Form 2555, Summary Report of Transfer of Ownership, which will also show the amount of any transfers between the participant, the participant's estate, and the organization. An organization generally has no obligation to make any further tax-related reports with respect to a transaction that is reported on Form 8758. If the transaction is more than 350 in the organization's income for the year, the organization will record the transaction on Form 8870. However, the income tax consequences described below will apply if the income or profits on which tax is attributable to the transaction exceed 350.

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