Covid Loan

[DPSRich]

A client took a covid related distribution in 2020.  We elected to have it taxed in 2020, 2021 & 2022.  In 2022 she repaid $20k (she had 3 years to repay all or part).  The $20k is less than the 2022 deemed taxable portion.

 

From what I have read, I have to act as if the original distribution was $20k less and basically spread the $20k over 3 years.  Correct?

 

Of course I would prefer to apply it all to 2022 for ease, but I think that is wrong.

 

Thank You for the response.

DPSRich