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C
ChiHoang
Level 6
April 4, 2024
Question

1099-R with Distribution code 1M

  • April 4, 2024
  • 1 reply
  • 15 views

I have a client with 1099-R distribution of $29K, and distribution code 1M.  He's under 591/2 years old.  Is this distribution taxable even though he told me it's a loan ? If it's not, how do I make it happen in ProSeries Basic ?

Thanks 

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1 reply

dkh
dkh
Level 15
April 4, 2024

Looks like your client had a taken a loan out of his retirement account through his employer.  Client no longer works for that employer would be my understanding of why 1099-R code 1M is issued which makes the distribution (loan) taxable.

 

    C
    ChiHoangAuthor
    Level 6
    April 4, 2024

    He still works at the same place but his company was bought out by other company. He's been paying off every week about 1/2 of the loan so far. 

    dkh
    dkh
    Level 15
    April 5, 2024

    Were there payments after the company was bought out?

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