IRS Notice 2009-82
This is a question in regards to the IRA Owners and Plan Participants now can put back unwanted RMD’s for 2009 ( IRS Notice 2009-82 ) –
I understand about the “rollback” itself and have executed it for someone who had taken a one-time RMD – I am being told however (by my broker dealer) for someone who has taken multiple RMD’s throughout the year (the account is on a monthly set amount distributon schedule) they would only be able to “rollback” one of the distributions. They state thatrollback[b] “Unfortunately, the client cannot roll back all of the distributions, he can only [/b] [b]one distribution. The one-rollver-per-12 month rule was not modified by the act, thus allowing only one distribution to be rolled back”[/b]
Is that true ? The reason I bring that up is, it really wouldnt make a lot sense being that a number of IRA holders who are under the RMD requirements spread their distributions over the year and if this was the case, the structure of the Act wouldn’t be very fair to those individuals who spread things out versus a lump sum one-time distribution. Please let me know your thoughts. Many thanks…
Permalink Submitted by Alan Spross on Wed, 2009-11-18 21:16
Yes, it is true. But also see the related thread by hhook that addresses a Roth conversion as a partial work around in getting additional distributions back to the TIRA.
You can see that even the Roth conversion strategy is limited to those monthly distributions taken within 60 days. It is obvious that the original legislation did not consider all the various automatic arrangements and plan amendments needed to allow monthly distributions to be stopped immediately. Further, the one rollover limit was not amended to allow the additional distributions to be rolled back in 2009. As a result, those who have been receiving installments all year are not going to get much relief from 2009-82, and that is not very equitable.
Those that are stuck with the distributions will have to take some comfort that future RMDs will be less because of the 2009 distributions, and tax rates may be lower this year than they will be in the future.