1099R Distribution

[Looney1966]

I took a distribution in 2015 from my retirement account and paid it back over 3 years, how should that be treated on my 2015 taxes?  I never filed that tax return a I received a 1099R from the financial institution for the full distribution in 2015, but should it all be taxable?

[SweetieJean]

Was it an actual distribution, or rather a loan?

[Looney1966]

I received a 1099-R for the amount I took out, so I believe a distribution, however I signed loan documents.

[dmertz]

There is no kind of distribution that you could have received in 2015 that was eligible for repayment over 3 years, so perhaps this was a loan from the retirement account.

What is the code in box 7 of the 2015 Form 1099-R?

Is the IRA/SEP/SIMPLE box marked?

Why are you asking about this now?  Did you receive a notice from the IRS?

[Looney1966]

If you actually read my message you would see I never filed my 2015 tax return and I began paying it back and I did not understand why I received a 1099R if it was a loan.  I mean why do I claim as income on my taxes if I am paying it back.  It was a 3 year loan against my retirement?

[dmertz]

You originally said you took a distribution in 2015.  That would have generated a 2015 Form 1099-R.  If you didn't receive a 2015 Form 1099-R, it must have been a loan instead,  In that case, I assume that the From 1099-R that you are referring to is a 2020 Form 1099-R and I'll assume that that is why you are asking the question now.

What is the code in box 7 of the 2020 Form 1099-R provided by the payer?

Is the IRA/SEP/SIMPLE box marked?

[Looney1966]

It is a 7 marked as normal distribution and no it was not from IRA and the box is not checked.

[dmertz]

This 2020 Form 1099-R is reporting a normal distribution, apparently from a qualified retirement plan.  If box 2b Taxable amount not determined is not marked, the taxable amount is shown in box 2a and box 5 would show the nontaxable amount, if any.

You apparently took a loan in 2015 and paid it back without defaulting on the loan.  That essentially restored the account to what it was before the loan except with the addition of some amount of interest that you paid on the loan.  Since there was no default of the loan, nothing regarding this loan would have added any nontaxable funds to the account.  The interest that you paid into the plan essentially amounted to taxable investment gains; it did not add any after-tax basis.

And to answer your original question, none of this has any effect on your 2015 taxes.  But perhaps you instead meant to ask what effect this has on your 2020 taxes.  The taxable amount of this distribution will be on Form 1040 line 5b, adding to your AGI which is then used to calculate your taxable income.  This distribution should also have been subject to a minimum tax withholding, shown in box 4 of the Form 1099-R.  This tax withholding will be combined on Form 1040 line 25d to be credited against your overall tax liability in determining your refund or balance due.

[Looney1966]

This has nothing to do with 2020.  I received the distribution in 2015 and received a 2015 1099-R for the same amount.  When I took the distribution out in 2015, I was under the impression that it would not be taxable as long as I paid this back.  I did pay the entire amount back with interest over 3 years.  

My question was:

Do I pick up the 1099R for the entire amount and if I do is there any way to offset it by what I paid back in 2015, 2016 and 2017? My taxable amount Box 2 is the same as Box 1.

I never filed my 2015 tax return or 2016 and now need to but want to do this properly. 

So from what you are saying I am fully taxed on this distribution?

[dmertz]

It makes no sense that you would have received a 2015 Form 1099-R for the loan shown on the document that you posted, so perhaps this Form 1099-R is for something else.    There are no circumstances where a distribution reported on a code 7 2015 Form 1099-R would be repayable over 3 years, so it seems that this Form 1099-R is not directly related to the loan.

If the code 7 2015 Form 1099-R is actually reporting some distribution that you haven't yet mentioned, whether or not it's taxable depends on whether or not you moved the money into another retirement account.  If you didn't move the money into another retirement account, the amount shown in box 2a of that Form 1099-R is taxable on your 2015 tax return (unless the 2015 Form 1099-R was issued in error and you can obtain a correction of that form from the payer).

You'll have to ask the financial institution why you received a code 7 2015 Form 1099-R.