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jim B7
New Member

Fraudulent withdrawal from IRA account recovered after end of year. 1099-R for the ditribution then cancelled. How to treat on tax return?

In May , 2023 a fraudulent withdrawal of funds from my IRA account was treated by the trustee as a 1099-R GROSS DISTRIBUTION, more than satisfying my RMD for that year. After year-end, In February, the funds were recovered and returnded to the IRA account. A 1099-R was issued in January before the recovery for the full amount of the fraud loss. In February, after the recovery of the funds, a corrected 1099-R was issued cancelling the previous 1099-R. The appropiate RMD's for 2023 were taken in February shortly after the cancellation.

What GROSS DISTRIBUTION/income is required to be reported for the year 2023 as the result of these transactions. How will that affect the 2024 RMD's/incometo be reported for 2024?

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