qbteachmt
Level 15
05-03-2021
12:32 PM
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"I looked on the 8915 and saw nothing pertaining to the early withdrawal penalty."
Because it's on the 1099-R worksheet. But you also need to pay attention to Partial Disaster, and part is Not.
"The only thing that I could think of was to change the code on the 1099-r from 1 early distribution to code 7 ordinary distribution but wouldn't want to create a situation with IRS."
You don't make that change. You have already been presented with a 1099-R. You didn't originate it and you don't change what was presented on it. You deal with what happened because of that distribution.
You should have early penalty on the $20k, which is sad and doesn't need to be part of that taxpayer's costs at all.
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Don't yell at us; we're volunteers