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- 401k distribution to a ROBS - Lacerte entry
401k distribution to a ROBS - Lacerte entry
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Kimberley
Level 3
02-17-2024
10:14 AM
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It is my understanding that the 401K distribution used for a ROBS (rollover as business startup) is a non-taxable event. I have not found much information on the requirements for this type of 401k distribution as it relates to the tax preparer.
The client has a $171K distribution reported on a 1099R with a distribution code 7 and both the distribution total and taxable total showing as $171K. In Lacerte, do we merely record this as an indirect rollover in the "To other than a Roth IRA" box?
Is there a time frame by which the distributed funds must be deposited into the ROBS?
Is a DL (determination letter) required for each of these transactions and if so, is that request the responsibility of the tax preparer or the agent assisting the taxpayer with the ROBS transaction, or the 401K administrator?
What liability does the preparer carry when recording this transaction?
1 Comment 1
qbteachmt
Level 15
02-17-2024
11:53 AM
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