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    joehamilton1968's Avatar
    joehamilton1968 Posts: 2, Reputation: 1
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    #1

    Feb 3, 2011, 04:54 AM
    1099 Q loss?
    Had a 529 plan that I contributed $25k of cash in 2006 and grew tired of it losing money and took the cash out 12/30/10. Value is only $20k at thtat date. So I received two 1099 Q's; the first one the gross distribution has $20k (box 1) and box 3, basis has, $20k. Rest are all zero's.

    The second 1099Q has negative $5k on line 2, earnings and $5k on the basis, line 3.

    How do I report this? I have taxcut but it is trying to jam me with penalties and pick up the income. I can't believe I have to pay tax on the $5k loss/$20k distribution when I originally chipped in $25k of after tax dollars. Thanks for any free advice!
    rfellen33's Avatar
    rfellen33 Posts: 1, Reputation: 1
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    #2

    Mar 18, 2012, 09:36 AM
    I have the same problem, looks like we may have to report this as a misc expense subject to the 2% floor of the agi.

    I really do not like the tax system...
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