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To: Tom Trader who wrote (39685)	4/15/1998 1:14:00 AM
From: Dom B.	Respond to of 58727

Tsquare...IMHO, this falls under the "Constructive Receipt" of income theory. Much like the interest earned on your passbook savings account (if you remember those by-gone days), not posted till you present the book after 12/31, but taxable in that year, though not available for you to spend until posted. Timing is on the side of the IRS. Again, just my imho. Been out of practice for more than 10 yrs. I symphathize...//dom

To: Tom Trader who wrote (39685)	4/15/1998 2:34:00 AM
From: Nancy	Read Replies (1) \| Respond to of 58727

Tom, It is in effect your 1997 income because the money was available for you had it not been put into 401K - and the mistake made on the 401K contribution probably due to miscalc the maximum amount allowed by law cannot be used to argue that the money is not 1997 income. On top of that, unless you get your payer to file a corrected 1099, which essentially rescind the old 1099 and moved the income to 1998 1099, you would have a hard time with IRS. :)

To: Tom Trader who wrote (39685)	4/15/1998 3:26:00 AM
From: Jerry A. Laska	Respond to of 58727

TT, OT RE: your tax question Interesting question, too bad tomorrow's the 15th. I'll take a stab at it. I'm no expert but it is my understanding that you must report the excess as wages on line 7 of the 1040 in 1997 because that is the year the money was earned and distributed to you via the 401(k). The distribution from the 401(k) has to occur before April 15th or else the entire distribution is subject to taxation again in 1998. In your case the the distribution has occurred so you are safe on that ground. The constructive receipt rule requires you to report income not actually received but which has been credited to your account, made subject to your control, or otherwise put aside for you. In this case the funds were when they were deposited in your 401(k). Instead of an excess distribution, if you were receiving a paycheck for work performed in 1997 but the paycheck was not delivered to you in 1997(or delivery was not attempted to you) then you usually would have to report that income in 1997. If the check was delivered to you in 1997 or an attempted delivery was made - for example, fed ex tried to deliver the paycheck by express mail to you on Dec. 31 but you weren't home then the IRS position is that the income must be reported in 1997. Take this with a grain of salt as I'm not an expert in this area and in any event I could be wrong. When dealing with the IRS it pays to be careful. Good luck, Jerry