Interaction of rollover and withholding

Submitted by Bob Williamson on Sat, 2016-01-16 17:11

In the fourth quarter of the year, a holder of a TIRA needs to take his RMD, and also realizes that he needs more withholding. So he takes a distribution from his TIRA, and instructs the custodian to withhold 100%. Then he makes a deposit into another of his TIRA accounts of the amount of the withdrawal that exceeds to RMD, within 60 days, using his own funds. There has not been a previous indirect rollover within the preceding year period. Is this a valid 60 day rollover?



Submitted by Alan - IRA critic on Sat, 2016-01-16 18:41

Yes, as long as no portion of the RMD was rolled over. The withholding taken from the distribution is treated as if it was paid to the taxpayer and then the taxpayer paid it to the IRS, so it counts toward the RMD.



Submitted by Bob Williamson on Sat, 2016-01-16 20:41

Thanks.



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