mlthomas26
Level 3
‎04-12-2023 08:59 AM

I have a client who received a 1099-R with a distribution code of 7.  The distribution happened first quarter of 2022. The distribution was taken out to put a down payment on a new home.  When the client sold their existing home, they paid back the distribution in the 3rd quarter of 2022.  How do I report this payback?

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sjrcpa
Level 15
‎04-12-2023 09:02 AM

You don't, except that the repayment may be an excess contribution.


The more I know the more I don’t know.
taxiowa
Level 9
Level 9
‎04-12-2023 09:05 AM

I believe it is reported on line 5a and 5b on the 1040.

Just-Lisa-Now-
Level 15
Level 15
‎04-12-2023 10:16 AM

They needed to put that money back within 60 days for it to be a rollover, if they waited that many months, you can't "repay" it to avoid taxes.    

That income is taxable and now theyve now got an excess contribution that needs to be removed ASAP.


♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
qbteachmt
Level 15
‎04-12-2023 11:53 AM

There still is time to correct this for tax year 2022. Well, about a week; or, put that return on extension and then they have time to make a corrective distribution including any attributable earnings. And you will have to report any withholding as part of the gross distribution (both times). The new 1099-R won't come until after the end of 2023, but both situations are reportable in 2022.

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