K-1 Box 14H

[Eli]

Client received a K-1. The only amount is 17,250.00 in Box 14H. She received this from a receivorship. Apparently a group of people including her were victims of fraud involving their retirement plans. The receivorship collected 69% of the money that they were defrauded. The 17,250 represents 69% of what was taken from her. I opened a Sch E pg 2 & did the K-1 input, but it doesn't seem to flow anywhere on the 1040. Am I missing something?

Thanks!!

Eli

[OldJack]

You are missing telling us that this is a 1041-K1. Did you expect us to just guess what you were talking about when you said 14H? 14H with a 1041-k1 is "other information" and is not telling you what to do about income taxes concerning the distribution. You have to find out what the taxpayer did on the previous tax returns about this investment (as to sale gain or loss) and decide how this distribution enters into the overall investment results.

[Eli]

You are missing telling us that this is a 1041-K1. Did you expect us to just guess what you were talking about when you said 14H? 14H with a 1041-k1 is "other information" and is not telling you what to do about income taxes concerning the distribution. You have to find out what the taxpayer did on the previous tax returns about this investment (as to sale gain or loss) and decide how this distribution enters into the overall investment results.

Old Jack, first of all thanks for replying. As for leaving out that info, it wasnt done on purpose. The taxpayer brought that form in & that was all she had. She has never had to file a 1041 before. This was retirement money earned as a teacher's aide. She invested some of the money with a firm who later stole the money from her & many others. This moeny was just part of her initial investment.

So what I'm looking for is guidance on how to proceed with it. If it's something beyond my knowledge then I will gladly pass it on.

Thanks again!

Eli

[kcjenkins]

Eli, if she had previously deducted the 'loss' of the money, then it's recovery is taxable and goes on Line 21. [ Line d, Reimbursement for deducted casualty or theft loss'. If she did not claim the loss, then it is just a recovery of basis, and it would, IMHO go on Sch D from the 4684, and you would thus claim the unrecovered basis as a theft loss.

[Eli]

Eli, if she had previously deducted the 'loss' of the money, then it's recovery is taxable and goes on Line 21. [ Line d, Reimbursement for deducted casualty or theft loss'. If she did not claim the loss, then it is just a recovery of basis, and it would, IMHO go on Sch D from the 4684, and you would thus claim the unrecovered basis as a theft loss.

It had not been reported before. I've done her taxes for the past 4 years & this is the first I've heard of this issue.

Thanks, KC!

Eli

[OldJack]

>>This was retirement money earned as a teacher's aide. <<

If this investment is in a qualified retirement account and she puts the money received back into the retirement account it should not be taxable or reportable.

[kcjenkins]

True, but since she has a loss still, she might be better off to take it now, and then invest the recovered money in tax exempt bonds, or even in taxable investments. Either way, she should take the recognized loss, this year, as this [2009] is the year the amount of loss was determined.