Suppose I have an IRA, and take 10k out of it on 12/15/2009. The 1099- R for 2009 shows 10k. Within 60 calendar days I pay back 4k. So my real distribution for 2009 is 6k. But the 1099-R says 10k. What to do?
1099-R and borrowing money from IRA
Feb 25, 2010
3 Replies
The procedure is on page 24 of the 1040 instructions. Basically you report the 10K on line 15a, 6K on line 15b, and the word "ROLLOVER" by 15b.
Show the gross income of $10K, but reduce the taxable to $6K. You'll only owe tax (and penalty if you're under 59 1/2) on the $6K.
Assuming you did this 60 day rollover just once in a 12 month period with that account, you add the 10,000 to form 1040 line 15a but add only 6000 to line 15b. Write Rollover on line 15.
When the IRS assembles your 5498s, it will see that indeed this was the case and will be able to verify your statement.
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