1099-R Code K: Assets Without a Readily Available Value

Your IRA distributed a hard-to-value asset instead of cash; pairs with a number showing your status.

What the IRS instructions say

Official meaning, from the Instructions for Forms 1099-R and 5498 Distribution of IRA assets not having a readily available fair market value, such as non-traded stock, partnership interests, or real estate.

Is it taxable, and does the 10 percent penalty apply?

Code K itself is about VALUATION, not a special tax rule: it tells the IRS the amount shown is an estimated fair market value for an asset with no ready market. The tax treatment comes from the number it pairs with. A 1K is an early distribution, taxable with the 10 percent additional tax possible; a 7K is a normal-age distribution; a GK is a direct rollover. Read the paired digit for the actual tax status.

Worth knowing: Because the value is an estimate, a later sale at a different price can change your numbers. Self-directed IRAs holding real estate, private notes, or partnership interests are where code K shows up.

Combinations you might see

Box 7 can carry two codes. With code K, the pairings mean:

1K / 2K / 7K: early with no known exception, early with an exception, or normal-age, applied to a hard-to-value asset
GK: a direct rollover of the hard-to-value asset
8K / JK: an excess contribution returned, or a Roth IRA early distribution, in hard-to-value assets

If this code looks wrong

The IRS matches Box 7 against your return, so start with the payer: request a corrected 1099-R, which is the IRS's standing instruction for incorrect forms. No corrected copy by the end of February? The IRS can contact the payer for you, and Form 4852 substitutes as a last resort. Remember that an indirect 60-day rollover is correctly coded 1 or 7, because the payer cannot see the redeposit; direct rollovers should show G or H, as our rollover guide explains before the paperwork ever gets cut.

← All 1099-R Box 7 codes

Sources: IRS Instructions for Forms 1099-R and 5498; IRS Tax Topics 558 (early distributions), 413 (rollovers), and 154 (incorrect forms). Verified July 2026.

General educational information, not tax advice. Your distribution's taxation depends on your facts; consult a qualified tax professional. ClearChoiceRadar is not affiliated with the IRS or any government agency.