"It's strange, this case I am facing, the 1099-R has M1 in box 7 (offset distribution) but the box 2 taxable amount is equal to the amount owe when leaving the employer"
snowbug, it sounds like in your case everything was handled entirely properly. The Form 1099-R is correct. Apparently the repayment that you did indeed was a rollover and you were issued a new loan; the loan that you have now is not the loan that you originally had. Simply report the Form 1099-R in TurboTax as a distribution that was entirely rolled over.
