NUA 2017 1099R
In 2017, I completed a lump-sum distribution of my ESOP with in-kind distribution of company stock into a brokerage account. Once the stock was in my brokerage account, I did not sell any stock in 2017. After reading many of the threads in this forum on this topic, I believe the 1099R that I received should represent the following information:
Box 1: Total value of in-kind stock distribution
Box 2A: Taxable amount which is the company cost basis of the stock
Box 2B: Total distribution checked
Box 6: Net Unrealized appreciation in employer securities. In this case, it represents box 1 less box 2A.
Box 7: ???
In Box 7, the plan administrator reported a distribution code of 7: normal distribution. Is this the correct distribution code? The administrator also flip flopped box 2A and box 6. The following are the amounts that I expected:
Box 1: $205,000
Box 2A: $6,000
Box 6: $199,000
Was the administrator incorrect?
Permalink Submitted by Alan - IRA critic on Mon, 2018-02-26 03:27
Code 7 is correct if you were over 59.5 on the date of the distribution. Are you sure that the cost basis was less than 3% of the fair market value of the shares on the date of distribution? If the correct Box 2a and 6 amounts have been transposed, then call them ASAP and have them issue a corrected 1099R. Otherwise, you are going to get a huge tax bill. I would not sell any of the shares until this is resolved unless you think the company is about to go broke. Also, if you find out that the 1099R is correct, please advise for a possible solution.