@user314 wrote:
Thank you for this post. I made an excess contribution to my Roth 401k in 2019 and had the excess distributed back to me prior to April 15 2020. My excess contribution resulted in a loss and the amount sent back to me was less than I had excess contributed. However the 1099-R I received shows the same amount in box 1 "gross distribution" and box 5 "employee contribution". The 1099-R cover letter shows the correct amounts and the loss though. How do I deduct the loss? Shouldn't they have put the full amount of my excess contribution prior to the loss in box 5?
For information see IRS Pub 525 page 10
https://www.irs.gov/pub/irs-pdf/p525.pdf
Report a loss on a corrective distribution of an excess deferral in the year the excess amount (reduced by the loss) is distributed to you. Include the loss as a negative amount on Schedule 1 (Form 1040), line 8, and identify it as “Loss on Excess Deferral Distribution.”
Enter as:
Miscellionious Income ->
Other reportable Income ->
Any Other Taxable Income (yes) ->
Description (enter "Loss on Excess Deferral Distribution" and amount as a negative number).
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
