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posted May 31, 2019 9:57:59 PM

I took an hardship early withdraw from my ESOP account for the purchase of my home. Is this withdraw subject to the 10% penalty?

Do i still need to enter both a 1099-R and 1099-B. When doing this it doubled the withdraw amount affecting my total income.

0 2 1597
2 Replies
Level 13
May 31, 2019 9:58:01 PM

Yes, you need to enter both the 1099-R and the 1099-B since the IRS will expect to see both of these reported on your income tax return.

Your "doubled withdraw" problem comes from using the wrong basis in reporting the sale.

Assuming a "same day" sale:

Typically what happens here is the 1099-R will have 3 boxes filled in: Box 1 with the gross distributions, Box 2a, the taxable amount and Box 6, the NUA.

Your basis is the Box 2a amount.

Just be sure that you record the sale as "long term" to get the proper capital gain rate.

Tom Young

Alumni
May 31, 2019 9:58:03 PM

Yes, it is subject to the penalty for early withdrawal.