Client received a 1099-R, code K7. IRA box checked, showing gross and taxable amount of 44,703.  He never received any money as Global Capital LLC was determined worthless.  Providence Trust Co was holding the worthless asset, decided to get it off their books and transferred to the client as a promissory note.  On the 1099-R worksheet I do not see a way to record a worthless asset and get it removed from taxable income.  Any suggestions would be greatly appreciated.