[hardwired]

I had no choice but to take a hardship withdrawal from my 401K after being let go by my employer. It was a difficult time also having been displaced by a house fire and having to rebuild our home and pay for a portion of our alternate living expenses not covered by the insurance company. Being a family of five along with two surviving pets(one didn't make it, may he rip) and living in tight quarters of a trailer for well over a year, we certainly sympathize with the hurricane victims in LA, MI, and FL.

We used the proceeds of the 401K to help rebuild the house and to a lesser extent help pay a dependant's college tuition. Is it possible to have the 10% distribution penalty waived under the circumstances? The distribution impact was also enough to negate any Hope, Learning credits, etc. The IRS seems to be merciless...

Also, is their anyway to deduct the additional trailer rental expenses that the insurance company did not cover (about $7K)?

[AtlantaTaxExpert]

Hardwired:

Off-hand, I do not see that any of the exceptions apply in your case, though you may be able to waive some of the penalty for the higher education costs of the dependent.

What code is present in Box 7 of Form 1099-R?

You can deduct the additional trailer expense under the Casualty Loss provisions of the Internal Revenue Code.

[hardwired]

Code 1 in Box 7.

[AtlantaTaxExpert]

Yes, that IS the code for early distribution, no known exception.

How much was distributed and how much is the dependent's college expenses?