End of Year Rollover
Clients RMD was calculated incorrectly resulting in an additional (excess over RMD amount) $1,000 withdrawal from their IRA. Distribution was done here at the end of December, the client is asking can they put the extra $1,000 back in as a 60 day rollover. Second part is, the funds would not be back in until first week of January 2016.
Since the rollover straddles the year-end is the distribution still taxable for 2015 since the rollover deposit was not until 2016, but within 60 days? It would seem that would negate the rollover?
Permalink Submitted by Alan - IRA critic on Wed, 2015-12-30 20:43
The excess 1,000 can be rolled back within 60 days, regardless of the calendar year. However, under the one rollover rule this can only be done if there was no prior IRA to IRA distribution rolled over in the past 12 months, While the 1099R and the 5498 will be issued in different years, the IRS might ask for a copy of statements which indicate that the 60 day deadline was met. In addition, the 12/31/2015 IRA balance used to calculate the 2016 RMD will have to be increased by 1,000 to reflect the outstanding rollover which was not in an IRA on 12/31.
Permalink Submitted by Stephen Csenge on Wed, 2015-12-30 20:54
Thank you very much.