1099R Box 5

[nytcpa2012]

Client's 1099R has more in Box 5 than in Box 1.  Since this is described by the IRS as the amount of investment paid in, should the overage in Box 5 be a capital loss?

[dkh]

Is 1099R marked Total Distribution ?

[nytcpa2012]

...I thought about that, but was thinking maybe we could take a pro-rata share each time $$ come out. I'm not easily finding anything on irs.gov or elsewhere that addresses this.

[sjrcpa]

And who issued the 1099-R? Gov't, insurance co.?

[nytcpa2012]

insurance co

[BobKamman]

Is this an employee pension, or a purchased nonqualified annuity?

[Skylane]

Insurance company payments generally indicate an annuity. Annuities payments are disbursed on a LIFO basis. Taxable earnings, are distributed before principle. If the amounts in box one and box 2 are the same, it would indicate that the distribution is taxable earnings. What is the code in box 7?

[nytcpa2012]

Box 7 is G. direct rollover, which of course makes sense with Box 2 being zero.  

So I know that the distribution itself in Box 1 is not taxable, just trying to get the taxpayer a little less tax liability by making the additional Box 5 eligible as either a capital loss (likely), or an ordinary loss(preferably).

[nytcpa2012]

it's being paid by a life insurance co if that's helpful; other than that I don't know. Is there a way to find out without putting the client through tax hell? The amount of current year tax to be saved would be in the $500 range.

[sjrcpa · Accepted solution]

You can't claim a loss on a rollover.

[dkh]

Since it's a rollover - doesn't the information in box 5 just get filed away for tracking basis information 

[nytcpa2012]

noted. thank you.