I have a participant who recently died. Mother is the beneficiary and the participant had a large outstanding loan balance. The mother will receive the 1099 R for the death benefit portion. Who receives the 1099 R for the outstanding loan balance and what code should be used?

In my opinion, the 1099-R should be done in the decedent's name/SS# and coded as any other loan distribution in the same circumstance. I assume there will be a final individual tax return filing if the person died in 2003, so I believe it is reported on his/her return.

pmacduff's opinion is in fact fact and his/her assumption is correct

Regarding your question or the correct code...


If the loan meets the requirement of 72(p), for instance, if the loan was within the 50/50 limitations, did not exceed the 5-year period ( unless it was used to purchase a primary residence), and repayments were made at least quarterly, the code will be ‘4’.

If the loan did not conform to 72(p), the code will be ‘4L’…