Conversion & Recharacterization
In 2016 a client converted their IRA value 160,200. She took her RMD in 2016. in April of 2017 she recharacterized $30,215 of the prior years conversion. Does she have an RMD due on this amount in 2017?
In 2016 a client converted their IRA value 160,200. She took her RMD in 2016. in April of 2017 she recharacterized $30,215 of the prior years conversion. Does she have an RMD due on this amount in 2017?
Permalink Submitted by Alan - IRA critic on Mon, 2017-12-11 22:19
Yes, under a rule for “outstanding recharacterizations”, the amount actually transferred back to the TIRA that was not in the TIRA at the end of 2016 must be added to the 12/31/2016 balance to determine the complete RMD for 2017. Use the amount actually transferred, not the amount that was recharacterized before the adjustment for earnings).