question for 1099-r gross distribution

Want to offer the timeline, a bit slower? Maybe with dates and $$ ? You say you 'paid off' the loan? Back to the 401(k), I take it? The

1099R should only be the amount transfered and you show it rolled over on your 1040.

Joe

what is the form to show timeline, I have date paid but I understand IRS doesn't want to read letter or handwriting.

I was asking for the chronology, as in:

3/5 - took out $2K loan from 401(k) 6/5 - transfered $8K from 401(k) to IRA 8/5 - paid back $2K loan to (?)

There is no form for the IRS, but sharing the exact sequence of events more clearly may help us reply. You see, I don't understand how or why you would have initiated a transfer while a loan was outstanding. That strikes me as looking for trouble. You can't transfer the whole account as the loan is supposed to remain secured by the 401(k). When you paid back the loan, where did that money go? If it didn't go right back to the 401(k), that may be your issue. I hope I am more clear. Joe

** 05/06 - took out $2K loan from 401K while making monthly payment of the loan

My company was bought by a new company, I didn't like the 401K plan of the new company, and liked Fedelity (which used by my former company) to administer both 401K and IRA

** 12/07 - transfer the rest from 401K plan to IRA, administered by Fedelity (while the loan is outstanding)

** 12/07 - paid off the loan to IRA (Fedelity) in the same month at the time of rollover (transfer)

Yes. You have bad timing. You should have paid the loan in full and then done a transfer of all funds to the IRA. I read "paid off the loan to the IRA". Well, you can't really do that. It was a 401(k) loan and when you transferred it, they withheld $2000 that you owed. You can't go back and claim the $2000 as a deposit to the IRA. What you have is a new IRA deposit, hopefully deductible, but a 10% penalty on the $2000 401(k) withdrawal. The 401(k) administrator should have warned you of this, but you likely did this on line or by form only, and didn't speak to a live person. I hope someone else will comment in case I am still reading your situation wrong.

Joe

Fedelity told me just write a letter to IRS. by the way the total amount of current fund in IRA is roughly equal to fund in 401K before loan was borrowed. I might to to IRS to ask them.

thanks for your prior reply