Actually, for someone over age 59½ where code 7 would be used on the Form 1099-R, it makes no sense to claim an HSA Funding distribution because the distribution is not subject to any early-distribution penalty. Such a distribution should instead be reported as an ordinary distribution and an above-the-line deduction should be claimed for a personal HSA contribution. Only an IRA distribution for someone under age 59½ reported with code 1 should be claimed as an HFD.
