jimjo

Anyone have any ideas about this?

What is the corrective procedure when for when someone did a direct rollover of all of their IRA accounts into a self-directed solo 401k, including the entire balance of an account with some after-tax basis from a nondeductible contribution? The rollover was done at the end of 2016, the original IRA account was closed. The 401k funds haven't yet been invested so have no earnings. 401(a)(31)-1, Q&A 14 indicates that "the amount of the invalid rollover contribution, plus any earnings attributable thereto, is distributed to the employee". But how do you complete the 1099-R for this situation, are taxes or penalties owed, and do they take the distribution as an early withdrawal, or can the funds be re-deposited into an IRA?