Rollover of Excess IRA Distribution
Client is over age 70 1/2 and taking RMD distributions from IRA monthly. The December distribution will exceed the required RMD for the year and client wishes to return the excess amount to IRA account. I understand this rollover can be accomplished within 60 days of the distribution, but does it matter if the return of funds takes place in the next calendar year?
Permalink Submitted by Alan - IRA critic on Sat, 2017-11-11 23:52
The rollover can be completed within 60 days regardless of the CY end. However, the client will be using up their only permitted 60 day rollover over a 12 month period, and this seems like a wasted use that could be prevented with better distribution planning. While it usually does not cause a problem, the 5498 form reporting receipt of the rollover contribution will be issued a year later than the 1099R, so the IRS will not have timely notification of the rollover contribution.
Permalink Submitted by Perry Samuels on Sun, 2017-11-12 23:56
Thanks. So if the 5498 will be issued a year later, how shouod the rollover contribution be treated on the current year tax return given that the 1099R will include the excess amount being returned?