I made a temporary withdrawal from my IRA account to use to buy a home. I took $10,000 out in Oct. and repaid the $10,000 in Nov. Should I show the net withdrawal $0?

[mx58xx]

On the advice of my IRA representative, I temporarily withdrew $10,000 from my 401k IRA to use as part of a downpayment for a home.   The funds were withdrawn from my Pershing LLC account on October 7, 2016.   I closed on the house in late October.  I then repaid the withdrawal with a check for $10,000 that was credited back into my IRA account on November 30, 2016. 

I received a 1099R from Pershing that shows a $10,000 distribution, however this form does not indicate that I repaid the $10,000 back into my account.

The October Pershing statement shows the $10,000 distribution and the November Pershing statement shows the $10,000 contribution.

How should I treat this temporary withdrawal on my 2016 tax return?

[DS30 · Accepted solution]

Because you received a 1099-R, the IRS will also have received a copy of this 1099-R. You will need to report this rollover 1099-R distribution on your tax return but none of it will be taxable. Just make sure that when you are reporting this information into TurboTax that for the question "What Did You Do With The Money From (your retirement fund)?", answer "I moved the money to another retirement account (or returned it to the same retirement account)" (see screenshot)

To enter your 1099- R in TurboTax Online or Desktop, please follow these steps:

1. Once you are in your tax return, click on the “Federal Taxes” tab ("Personal" tab in TurboTax Home & Business)
2. Next click on “Wages and Income” ("Personal Income" in TurboTax Home & Business)
3. Next click on "jump to full list" or “I’ll choose what I work on”
4. Scroll down the screen until to come to the section “Retirement Plans and Social Security”
5. Choose "show more", then IRA, 401(k),Pension Plans (1099-R) and follow the onscreen instructions

Please note that all distributions will be reported on your tax return (whether or not they are taxable) on Form 1040 on line 15(a) (or 16(a)) but only the taxable portion will show on your return as taxable on line 15(b) (or 16(b)).

To preview 1040 in TurboTax Desktop, just switch to forms mode.

For TurboTax Online users:

• Sign into https://myturbotax.intuit.com/
• Under Tax Timeline, click on Continue your return
• Go to "My Account" > "Tools"
• Under the Tools Center, select "view tax summary"
• Select "Preview my 1040"