1099 R

Forum|Forum|4 years ago
February 17, 2022
4 replies
15 views

Taxpayer claims he can borrow from his IRA and repay within 60 days, without tax consequence. He borrowed in CY 2021and repaid in CY 2022. His 1099R for CY 2021 shows Box 7 Distribution Code 1. Early distribution, no known exception. How do I treat this?

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IRonMaN

Level 15

Wait the 60 days before you prepare the return.

Slava Ukraini!

rbynaker

Level 13

I agree. I do the same things with IRA contributions (or SEP-IRAs). Show me where you made the contribution and I'll reduce the income on the return that I have to sign under penalty of perjury. If it hasn't happened yet, no worries, that's why I have a "hold" shelf.

J

jeffmcpa2010

Level 10

I think you are talking about this "a "60-day rollover" occurs when you receive a distribution from your IRA, and deposit the money into another IRA or back into the same IRA within 60 days. If you comply with the 60-day deadline, the distribution is not taxed. If you miss the deadline, you will owe income tax, and perhaps penalties, on the distribution.

I think you would want to see the actual paperwork to be certain that the 60 days was met, (Not someone figuring that 2 months was close enough).

60 day rollover's are limited to 1 "In any one year period".

Enter in section B on page 2 of the 1099-R worksheet. (I think)

qbteachmt

Level 15

"Box 7 Distribution Code 1. Early distribution, no known exception."

Because the issuer has no idea if that was Rolled over or not.

"60 day rollover's are limited to 1 "In any one year period"."

Both are "to the Day." Your client should reconsider treating this as a piggy bank.

https://www.investopedia.com/articles/retirement/06/rollovermistakes.asp

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