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Level 2
posted May 18, 2023 5:23:26 PM

I over contributed after tax 401k in 2021, then I withdraw excess money in 2022 Feb, there is some capital loss during the withdraw. How to report this loss to IRS?

The capital loss is due to ETF drop. I receive 1099-r for this withdraw, however 1099-r doesn't mention the loss. How to report this loss in tax return?

0 1 310
1 Replies
Level 15
May 21, 2023 5:24:55 AM

return of excess contribution:

before tax due date including extensions: 

positive earnings allocable to the excess are taxable on the Line 4b for the year of the contribution. negative earnings are ignored; in which case, for purposes of basis, consider the original requested amount as returned.

 

positive earnings removed are penalized 10% if you are under age 59 1/2.

@zfyang