Tax Reporting Defaulted Loans

[DTH]

If a loan was tax reported as a "deemed distribtion", do you need to tax report it again when a distributable event occurs.

Example: Participant defaulted on a loan in 2000, there was no distributable event and the defaulted loan was tax reported as a "deemed distribtion."

The participant did not make any repayments on the loan after the default date.

The participant terminated in 2002 and has left the cash in his account. The loan note can now be foreclosed and the note assets are offset by the distributable event. Do you need to tax report the "actual distribution" of the note? If yes, the 1099-R Box 1 would show the loan default amount and Box 2a would be left blank.

Thanks!