Return of Excess Question
Hello,
I have a client who made a contribution to their SEP IRA on 02/02/2023 and know needs to return a portion of the contribution. The SEP IRA was fully rolled over to the client’s existing traditional IRA on 12/0//2023. My question is it possible to do one calculation and combined the beginning FMV of each account and the money moving between the accounts would cancel out in the inflow and autoflows or would we need to do 2 calculations based on when the funds were in each account?
Thank you.
Permalink Submitted by Alan - IRA critic on Mon, 2024-02-26 23:10
The adjusted opening balance and any contribution or distribution activity with the SEP IRA can be provided to the current custodian to enter into their software to determine the earnings adjustment for a return of the excess, and if an incorrect deduction was taken on a 2022 or 2023 return, that return must be amended. However, if the current custodian will not cooperate and wishes to use another method then use that method unless it makes no sense.