1099-R Rcvd as a distribution on a investment that was a total loss. Client did not get any money back.

Forum|Forum|6 years ago
March 25, 2020
17 replies
43 views

I have a client who rcvd a 1099-R for $115k as an early distribution. His entire account was lost on a bad investment through the company that held is 401k. His account is 0-he has no money left nor did he get the $115k that is stated on the 1099-R. Is it possible to deduct this? Thank you!

ProSeries Professional

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Best answer by George4Tacks

would I choose rollover and when he gets a notice from the IRS explain it all?

Code K is a hint that you might just put taxable amount = zero. Make sure the client has clear evidence that the value truly was zero.

qbteachmt

Level 15

Are you stating the 1099-R is fraudulent and can prove it?

Don't yell at us; we're volunteers

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dianejhartAuthor

Level 5

Yes, he did not get the money, the company lost his entire investment and then sent him a 1099-R as a distribution.

sjrcpa

Level 15

And that $115K was his original investment amount?

The more I know the more I don’t know.

Just-Lisa-Now-

Intuit Community Champion

Are you asking to deduct it or are you asking to not include it as income?

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

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dianejhartAuthor

Level 5

What would be the correct procedure? I input the 1099-R-but he did not actually receive this money, how do I show that? It was a loss of his entire investment, not a distribution.