@vsouvalian wrote:
Turbo Tax shows me how to do what you are referring to. The problem at hand is determining the deferral amount gain during this time since its not just the excess deferral that has to be accounted for but the gain as well. The initial gain is from my 401K and additional gain or loss when it was rolled over. I want to report both gain and excess deferral.
I'm not sure that you are on the right track. As far as we (me and @dmertz agree), you can't do a corrective distribution unless you can somehow roll money back into the 401k from the IRA. If you are able to do that, then you must roll back enough to remove the excess contributions and the earnings. Calculate the earnings only based on how long the money was in the 401k, don't count the time it was in the IRA.
However, if you can't roll back the money and do a corrective distribution, then you leave all the money in the IRA and pay tax whenever you withdraw it. You must also add the amount of the excess deferral back to your taxable income. However, the amount of the add-back that you pay tax on is only the excess deferral and not the earnings.
