How do I enter this 1099-R in Turbo tax
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When you enter the Form 1099-R, indicate as rolled over whatever amount of the box 1 amount on this Form 1099-R that you deposited into another qualified retirement account as a rollover contribution. Enter the Form 1099-R under Wages & Income -> Retirement Plans and Social Security -> IRA, 401(k), Pension Plan Withdrawals (1099-R), then indicate that you moved the money to another retirement account and enter the amount you rolled over. TurboTax will exclude the amount rolled over from the amount reported on Form 1040 line 4b and will included the word "ROLLOVER" next to the line.
If I were to rollover the net money(after I took out the loan)to another employer plan, could I then take a loan from the rollover(to the new employer plan), put it into another rollover IRA and then would this qualify as a rollover of the 1st loan proceeds so no tax would be owed on the original loan? In other words have I now rolled over the loan offset from my 1st employer?
Thanks
Yes, 24jaijay, you could do that. You could even complete the rollover of the offset distribution by rolling it over to the new employer's plan instead of rolling it over to an IRA. It might seem a bit strange to take money out of the new plan as a loan just to put it back into the same plan as a rollover contribution, but nothing in the tax code prevents you from doing that and it would accomplish your goal of moving the loan to the new plan.
Thanks, actually the new plan loan is going to be put into a new rollover IRA and not back into the same plan as I don't yet know if my new employer will allow the loan offset to be rolled into the new plan. A broker suggested I do it this way to satisfy the rollover requirements of a loan offset - my CPA said this will not work because the loan from the rollover into the new employer plan is pre-tax money and cannot be used to satisfy the loan offset rollover, but others, including yourself appear to think it will work.
Is the use of the pretax money(loan)an issue?
Thanks
I have no idea why a CPA would not understand that money is just money. It's quite reasonable to obtain a loan to get the money to complete the rollover of an offset distribution. It just so happens that you are proposing getting the new loan from your new 401(k) plan rather than obtaining a loan from some other source. Once you have the cash in your hand you can do with it what you want, including using it to fund the rollover of the offset distribution.
Thank you for the help.
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