401k Distribution - partial payback

Forum|Forum|4 years ago
April 21, 2022
5 replies
10 views

Ok guys - I have not seen this before...

Client took out $88k 401k distribution in 2021. She did it because she thought she would need the funds due to surgery she had and a purchase of a house in Florida (she was planning to move there).

She changed her mind about moving and ended up paying back $67k in the same year she took the distribution. Did you guys see this before?

As always -appreciate your insights.

ProSeries Professional

This topic has been closed for replies.

T

TaxGuyBill

Level 15

Was it within 60 days of the distribution? If so, it seems like a rollover to me.

Just-Lisa-Now-

Intuit Community Champion

If she paid it back within 60 days, rollover, if not, taxable event and she probably needs to get it back out of there.

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

T

Terry53029

Intuit Community Champion

Did she really take a distribution, and receive a 1099R, or did she take a loan ?

qbteachmt

Level 15

I am assuming you already put this on extension. That will also provide for corrective distribution by the due date of the return, which might also be a bit of a loss (since the market has been down from year end), so it might not hurt too badly if this isn't qualified as Rollover.

Don't yell at us; we're volunteers

K

K-Tax

Level 2

Doesn't the 60 day rule only apply if the taxpayer returns the entire amount in full including any tax withheld?

Was it a loan or an actual distribution on 1099R? Makes a big difference.

qbteachmt

Level 15

There can be a partial Rollover (redeposit).

Don't yell at us; we're volunteers

Sign up

Login with SSO

Let's get you signed in

Login with SSO