Excess 401k deferral contribution, returned in same year, net of a loss and documented in a 1099-R

[divad1]

1. Hello. To confirm, should the amount of the loss (on excess contributions) be reported in Less Common Income, Misc Income, Other income not already reported on a w2 or 1099, “Other”, putting the loss amount and description as “20xx excess 401k deferral - loss netted in gross distribution on 1099R”? Is this correct? If not, please elaborate. Presumably, this seems right since you need to do that so the actual full true excess amount contributed is reported being fully returned (and thus fully reported as income). This full original excess figure to add to income would be the combination of the gross distribution amount per the 1099R (which was reduced by the loss) AND this Other Income amount (equal to the Loss). Is this accurate? Thanks. 2. Separate from recording additional income per #1 to reflect the gross original excess contribution, can and should one report the actual loss to reflect the actual loss or reduction in income in the tax return? Isn’t it in effect, an after tax amount that was invested and lost value and thus, Is the same as if one invested after tax funds, bought say stock or mutual funds then sold at a loss? This seems right. One can report the loss as a negative amount in the Less Common Income, Misc Income, Other Reportable Income to reflect the actual loss, correct? This would be a totally separate distinct line from reporting the additional excess contribution per #1. I believe I saw this as an example in TT instructions though not entirely certain. Please advise and help me understand. Thanks very much in advance!

[macuser_22]

Correct.   The amount of the excess must be reported a 1040 line 1 taxable wages and any loss enters a 1040 Schedule 1 line 8 "Other income" as a negative number that  reduces the taxable income by that amount.