Roth Conversion – Waiver for 60 day rollover rule

Submitted by Jim Hanna on Fri, 2019-05-03 14:53

Scenario:
Client requested a distribution from his IRA in December 2018 for the purpose of a 2018 Roth conversion. The financial institution neglected to distribute funds due to an oversight on their part. The financial institution issued the funds on April 12, 2019 and backdated the distribution record to December 2018. Client paid taxes due on that distribution for 2018. Client mailed the Roth contribution to the financial institution on April 15, 2019.

Financial institution will not accept the funds because it is outside of the 60 day window.

How does the client request a waiver for this transaction since the financial institution caused the error?



Submitted by Alan - IRA critic on Fri, 2019-05-03 17:41

  • Is this the same financial institution? If so, since they backdated the distribution they should simply have done a same trustee transfer to a Roth IRA. However, if the client intended to either roll over or convert the original distribution to another custodian in order to get the new institution to accept it, client will have to apply Rev Procedure 2016-47 (self certification procedure reason a ( custodian error). See following link:
  • https://www.irs.gov/pub/irs-drop/rp-16-47.pdf

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