RMD Followed by Reverse Rollover of IRA to Solo 401K in same year
I have deductible and non deductible contributions in IRA. I have determined and distributed 2024 RMDs. In order to separate deductible and non deductible portions of IRA, I plan to do a reverse rollover of deductible portion (pre tax) to my solo 401K this year (2024). Balance of IRA (non deducted portion) will be converted to or rolled to my Roth IRA. Two Questions – (1) How do I determine taxable amount of the 2024 RMDs? How is this calculation impacted if the balance of the Traditional IRA is $O at 12/31/24 after the 2024 RMDs and the Reverse Rollover?
Permalink Submitted by Alan - IRA critic on Tue, 2024-05-28 18:48
Form 8606 will calculate the taxable/non taxable % of your RMD and that % will also apply to your conversion. Your entire basis will be spread across the RMD and the conversion such that the total amount of your IRA basis is applied to those two transactions and the excess of your basis will be taxable. The reverse rollover amount is not reported on the 8606 and is only reflected by the year end IRA balance being 0.