IRA received direct rollover funds from an annuity before RMD was taken.
Hello,
If a client held an annuity and the funds were directly rolled over into an IRA before the RMD was taken at the annuity, what is the best option to correct this?
Would it be a Return of Excess out of the IRA for the RMD amount or should the funds be sent back to the annuity?
Thank you
Permalink Submitted by Alan - IRA critic on Thu, 2019-04-04 22:18
In which kind of account was the annuity, an IRA annuity, a qualified employer annuity, or a non qualified annuity? A direct rollover can only be done from a qualified employer annuity. If an IRA annuity and the money was moved by direct transfer, there is no distribution and no 1099R. If an RMD is actually distributed and rolled over however, it does create an excess IRA contribution which must be removed from the IRA with earnings, but would not be sent back to the annuity.