I have a client with 1099-R distribution of $29K, and distribution code 1M. He's under 591/2 years old. Is this distribution taxable even though he told me it's a loan ? If it's not, how do I make it happen in ProSeries Basic ?
Thanks
Looks like your client had a taken a loan out of his retirement account through his employer. Client no longer works for that employer would be my understanding of why 1099-R code 1M is issued which makes the distribution (loan) taxable.
He still works at the same place but his company was bought out by other company. He's been paying off every week about 1/2 of the loan so far.
Were there payments after the company was bought out?
Yes
Something doesn't sound right. He should check with the Plan Administrator about the loan. If he made the scheduled payments there should not be a 1099-R for a loan default.
OK. Thanks
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