IRA Trasfer before a RMD

Submitted by Richard Pasick on Fri, 2020-04-24 21:17

I have a 72 year old client who took a monthly (1/12th) RMD in Jan. 2020. In late Jan. he did an IRA transfer from one IRA account into another. He then took RMD’s for Feb. and March. The custodian is saying that his transfer in late Jan. was his full RMD and cannot be undone since it was in Jan 2020. Is this correct? Can his transfer be viewed as his entire years RMD and at this point not be undone? Thanks,



Submitted by Alan - IRA critic on Fri, 2020-04-24 21:51

  • A direct transfer is not a distribution, will not be included on a 1099R, and is not reported on client’s tax return. Actual distributions were taken in Jan, Feb, and March. Unless client qualifies for a corona virus related distribution, the January distribution cannot be rolled over, and only one of the Feb or March distributions can be rolled over. But of those two distributions, the one that is not rolled back to the TIRA can still be converted to a Roth IRA. Deadline for these rollovers or conversions is 7/15.
  • It sounds like what you are stating to be a transfer, the custodian is describing as a distribution. And none of those distributions were actually RMDs because RMDs were waived. Any distribution is therefore just a distribution and any direct transfer is totally ignored.

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