Distribution from Madoff Victim Fund
Finally, after almost 9 years i received a distribution.
This was originally in an IRA fund.
Because of the delay, I am now over 701/2 years old, taking RMD from my other IRA fund.
Will any provision be made to put this back into an IRA,given the circumstances, even though I am over 701/2
Permalink Submitted by Alan - IRA critic on Tue, 2017-11-14 23:38
Yes, this is known as a “restorative payment”. As long as these losses came from your IRA account and the check was made out to your personally (not to your IRA) you have 60 days to roll the proceeds back into your IRA account, even if the account that the losses came from is no longer open. Often you can just endorse it over “for deposit to account # xxxx”, but check with your IRA custodian. If the check was made out to your IRA account FBO you you can treat it as a non reportable transfer, and it will not use up your one permitted 60 day rollover for the next 12 months. There have been several IRS letter rulings allowing these rollovers including at least one related to Madoff. It is not clear whether the IRS considers these as “outstanding rollovers” that could increase your current and some past RMDs, but at this point you should be OK not changing your 2017 RMD, but the increased year end value this December will increase your future RMDs somewhat. If your custodian will not accept the restorative payment, please advise and I will post some of the PLR numbers issued on this subject.