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    1099 r

    I use proseries pro, just finished a return. There is a 1099 R box 7 code 8. I did not show up on 1040 line 16b. It is taxable, right? do I have to override on 1040 line 16a and 16b?

    #2
    Originally posted by liberty View Post
    I use proseries pro, just finished a return. There is a 1099 R box 7 code 8. I did not show up on 1040 line 16b. It is taxable, right? do I have to override on 1040 line 16a and 16b?
    I haven't done one of these for a while, but maybe it is showing up on Line 7, since it was actually compensation? This is a 401(k) plan, I'm guessing. You should not have to override anything.

    See also instructions for Form 1040, which state this about Line 7: "Corrective distributions from a retirement plan shown on Form 1099-R of excess salary deferrals and excess contributions (plus earnings). But do not include distributions from an IRA* on line 7. Instead, report distributions from an IRA on lines 15a and 15b."

    So was this 1099-R for an IRA or not?
    Last edited by Rapid Robert; 03-10-2018, 02:51 PM.
    "You said it, they'll never know the difference. Come on, we'll paint our way out!" - Moe Howard

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      #3
      Code 8

      Originally posted by liberty View Post
      I use proseries pro, just finished a return. There is a 1099 R box 7 code 8. I did not show up on 1040 line 16b. It is taxable, right? do I have to override on 1040 line 16a and 16b?
      A review of The Tax Book Individual and Small business edition reveals the following:

      "[code] 8 Distribution from an IRA to pay for higher education expenses of the taxpayer, spouse, child, or grandchild. Qualifying expenses
      include tuition, fees, books, supplies, equipment, and room and board if at least a half-time student. [IRC ยง72(t)(2)(E)]
      Caution: To qualify, expenses must be paid in same year as IRA distribution. (Duronio, T.C. Memo. 2007-90)"

      Page 13-3.

      I suspect you need to make some additional inquiries.
      Friends double; family triple. Don't buy an audit for yourself. If someone has to go to jail make sure it is the client. Remember it is only taxes, nothing important.

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        #4
        You are confusing Form 5329 codes with 1099-R codes. The OP was asking about 1099-R code 8.
        "You said it, they'll never know the difference. Come on, we'll paint our way out!" - Moe Howard

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          #5
          My take here is code 8 is removal from a plan; an excess contribution (the amt contributed was over the limit). Taxable if the amount was deducted when it originally went in and not taxable if it was not deducted when it originally went in. Interest earned by the money while it was in the plan has to also come out as taxable.

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            #6
            Originally posted by John of PA View Post
            My take here is code 8 is removal from a plan; an excess contribution (the amt contributed was over the limit). Taxable if the amount was deducted when it originally went in
            Agree; and if it was a 401k plan than obviously it was deducted from wage income originally, so that's where it goes back in as taxable. There is a slightly different code that means essentially the same thing as code 8 but for a prior year (requires amendment), because the excess came out too late.

            This is not that rare of a situation e.g. Highly Compensated Employees (HCE) when the plan fails the tests for HCE participation. There should not be any need for an override in the software.
            "You said it, they'll never know the difference. Come on, we'll paint our way out!" - Moe Howard

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              #7
              Originally posted by Rapid Robert View Post
              You are confusing Form 5329 codes with 1099-R codes. The OP was asking about 1099-R code 8.
              Opps. Thanks for pointing that out.
              Friends double; family triple. Don't buy an audit for yourself. If someone has to go to jail make sure it is the client. Remember it is only taxes, nothing important.

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