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1099R, Code 1L

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    1099R, Code 1L

    Taxpayer has a Code 1L on 1099R. She is still employed by the same business where she took the loan out on her retirement. Since still employed by them doesn't the Code 1L mean she defaulted on the loan? Did not pay it back?

    #2
    Originally posted by geekgirldany
    Taxpayer has a Code 1L on 1099R. She is still employed by the same business where she took the loan out on her retirement. Since still employed by them doesn't the Code 1L mean she defaulted on the loan? Did not pay it back?
    That's correct. Since she defaulted on the loan she has to pay the penalty. It is no longer a loan. It's an early withdrawal.
    Everybody should pay his income tax with a smile. I tried it, but they wanted cash

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      #3
      thanks just want to double check before I tell her. She thinks she doesn't have to pay tax on it. Gal from my slow talker thread

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