The truth is I decided it wasn't in my best interest. Etrade had told me before I made the transfer it would be simple for me to change my mind and withdraw the funds before tax filing time (WRONG), and I think because of that error, they recoded the employer portion of the contribution in a way that made it possible to remove all the funds and return them to me (they recoded all of it as employee contribution, and therefore it was all excess contribution.)
Unfortunately, I don't understand the ins and out of this fiasco. It's a piddly amount of earnings, and I would be happy to report $357 as ordinary income or capital gains in either tax year. But I don't want my returns flagged for audit for 401k irregularities. And I don't have an accountant. My sole prop doesn't need one, except for this mess 🙂
