John A Posted December 30, 1999 Posted December 30, 1999 I'm confused by the following in the 1999 1099-R instructions pertaining to investment losses: First, there is a section of the 1099-R instructions that covers losses for a corrective distribution of excess deferral made in a year after the year of deferral. However, I am not sure how to interpret the instructions. What does seem clear is that the participant must report the amount of the excess deferral, unadjusted for loss, in the year of deferral and may report the loss in the year the distribution is made. What is not clear to me is: 1) Should the actual distribution be reduced by the loss, or should it be the amount of the excess unadjusted by the loss? 2)Should the amount reported on the 1099-R in Boxes 1 and 2a be reduced by the loss, or should it be the amount of the excess unadjusted by the loss? (the answer seems to depend on the answer to 1) since the instructions seem to indicate that the actual amount of the distribution should be reported) 3)How is the participant notified of the amount of the loss for tax purposes for the year the corrective distribution is made? Second, I am not finding instructions related to losses allocated to excess contributions, excess aggregate contributions, and excess annual additions. Are these losses treated analogous to excess deferral losses, or is there other guidance? I'd have the same 3 questions noted above for losses in these areas. Finally, does the answer change for any corrective distribution with an allocated loss due to when the distribution is made (before or after March 15, before or after April 15)?
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