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Posted by Turborob on April 14, 2008, 9:47 pm
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Although it is the last minute and I will probably file an extension,
I am hoping someone can help explain a 1099R I received from my ex-
employer. I had a 401K account from which I borrowed approximately
$13K in 11/2004. I paid back approximately $1K of that and left the
company in 04/2005 with a loan balance of $12K. For whatever reason,
they didn't consider the loan distributed until the 2007 tax year. I
realize that I owe the tax and a 10% penalty on the outstanding loan
balance, but for some reason they are stating a distribution amount on
the 1099R of $14K. Where could this number be coming from?
Any ideas would be appreciated...
Rob
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Posted by Paultry on April 14, 2008, 10:16 pm
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Turborob wrote:
> Although it is the last minute and I will probably file an extension,
> I am hoping someone can help explain a 1099R I received from my ex-
> employer. I had a 401K account from which I borrowed approximately
> $13K in 11/2004. I paid back approximately $1K of that and left the
> company in 04/2005 with a loan balance of $12K. For whatever reason,
> they didn't consider the loan distributed until the 2007 tax year. I
> realize that I owe the tax and a 10% penalty on the outstanding loan
> balance, but for some reason they are stating a distribution amount on
> the 1099R of $14K. Where could this number be coming from?
>
> Any ideas would be appreciated...
>
> Rob
>
Principal plus unpaid interest?
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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Posted by Turborob on April 16, 2008, 4:49 pm
Please log in for more thread options > Turborob wrote:
> > Although it is the last minute and I will probably file an extension,
> > I am hoping someone can help explain a 1099R I received from my ex-
> > employer. I had a 401K account from which I borrowed approximately
> > $13K in 11/2004. I paid back approximately $1K of that and left the
> > company in 04/2005 with a loan balance of $12K. For whatever reason,
> > they didn't consider the loan distributed until the 2007 tax year. I
> > realize that I owe the tax and a 10% penalty on the outstanding loan
> > balance, but for some reason they are stating a distribution amount on
> > the 1099R of $14K. Where could this number be coming from?
>
> > Any ideas would be appreciated...
>
> > Rob
>
> Principal plus unpaid interest?
That is what they claim, but why would unpaid interest be deemed a
distribution? I understand paying the tax and penalty on money I
withdrew since tax was never paid on it previously, but accrued
interest is not money that I ever received. I just don't understand
it I guess. So the benefits company screws up, doesn't issue the 1099
in the correct year, adds a bunch of interest to the loan and I wind
up with a larger tax burden...there just isn't any logic there.
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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Posted by removeps-groups@yahoo.com on April 17, 2008, 3:28 pm
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> That is what they claim, but why would unpaid interest be deemed a
> distribution? I understand paying the tax and penalty on money I
> withdrew since tax was never paid on it previously, but accrued
> interest isnotmoney that I ever received. I just don't understand
> it I guess. So the benefits company screws up, doesn't issue the 1099
> in the correct year, adds a bunch of interest to the loan and I wind
> up with a larger tax burden...there just isn't any logic there.
You you only took out 13k, but they claim you took out 14k (of which
1k is interest, capital gain, whatever)? Have you tried to resolve
the issue with them?
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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Posted by Turborob on April 18, 2008, 7:27 pm
Please log in for more thread options On Apr 17, 3:28 pm, "removeps-gro...@yahoo.com" <removeps-
gro...@yahoo.com> wrote:
> You you only took out 13k, but they claim you took out 14k (of which
> 1k is interest, capital gain, whatever)? Have you tried to resolve
> the issue with them?
I've had several phone calls with them but they are not particularly
cooperative. They claim that it is normal to add on accrued interest,
which in this case is $2K. Since this mysterious accrued interest is
not money I ever received from my pre-tax 401K, I'm not sure why the
IRS would expect me to pay income tax on it.
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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