removeps-groups[at]yahoo.com wrote:
- quote -

If he amends the 2005 return to reflect what the outstanding loan
balance was at that time, he won't.

- quote -

I assume he has not been continuing loan payments after he left the job.
The interest is accrued, not actually paid.


- quote -

He says his former employer screwed up by issuing the 1099-R two years
late. So, if they had issued it on time, for tax year 2005, he would
have paid tax and early distribution penalty on or before mid-April
2006. It's now two years later, he still hasn't paid any tax. Sounds
like a deal to me!

-Mark Bole




--
Mark Bole

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On Apr 19, 9:58 am, Mark Bole <ma...[at]pacbell.net> wrote:

- quote -

But if he never received this 1k interest why should he pay taxes on
it?

To original poster: Where is the 1k now? Is it still in the account,
but maybe bigger now? Try to look at your monthly, quarterly, or
annual statements over the years to track where this 1k is.


- quote -

Sorry, I don't understand.

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removeps-groups[at]yahoo.com wrote:
- quote -

One option is to amend your 2005 tax return to reflect the distribution
as it should have been reported at that time, and then attach a
statement to your 2007 return explaining that the 1099-R was previously
accounted for.

However, you would then have a two-year-overdue tax payment to the IRS
for 2005 which would be subject to interest. Having a two-year grace
period on paying your full tax, and avoiding amendments and attachments,
might be sufficient to overcome the extra tax and penalty on the accrued
interest.

-Mark Bole

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

On Apr 17, 3:28 pm, "removeps-gro...[at]yahoo.com" <removeps-
gro...[at]yahoo.com> wrote:
- quote -

I've had several phone calls with them but they are not particularly
cooperative. They claim that it is normal to add on accrued interest,
which in this case is $2K. Since this mysterious accrued interest is
not money I ever received from my pre-tax 401K, I'm not sure why the
IRS would expect me to pay income tax on it.

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

On Apr 16, 1:49 pm, Turborob <TurboRob...[at]gmail.com> wrote:

- quote -

You you only took out 13k, but they claim you took out 14k (of which
1k is interest, capital gain, whatever)? Have you tried to resolve
the issue with them?

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

On Apr 14, 10:16*pm, Paultry <paultr...[at]afn.org> wrote:
- quote -

That is what they claim, but why would unpaid interest be deemed a
distribution? I understand paying the tax and penalty on money I
withdrew since tax was never paid on it previously, but accrued
interest is not money that I ever received. I just don't understand
it I guess. So the benefits company screws up, doesn't issue the 1099
in the correct year, adds a bunch of interest to the loan and I wind
up with a larger tax burden...there just isn't any logic there.

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

Turborob wrote:
- quote -

Principal plus unpaid interest?

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

Although it is the last minute and I will probably file an extension,
I am hoping someone can help explain a 1099R I received from my ex-
employer. I had a 401K account from which I borrowed approximately
$13K in 11/2004. I paid back approximately $1K of that and left the
company in 04/2005 with a loan balance of $12K. For whatever reason,
they didn't consider the loan distributed until the 2007 tax year. I
realize that I owe the tax and a 10% penalty on the outstanding loan
balance, but for some reason they are stating a distribution amount on
the 1099R of $14K. Where could this number be coming from?

Any ideas would be appreciated...

Rob

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >