ira distributio/contribution
my name is gary vaughn i am a financial advisor in florida. Can you make a contribution to an ira in the same year as you took a distribution(this distribution isn’t an rmd, it is interest only from an ira annuity)? my email address is: [email protected] or 941-625-5080. thank you
Permalink Submitted by Alan Spross on Mon, 2010-09-13 17:57
No problem making the contribution. There are are couple possible tax consequences besides the actual tax for taking the distribution:
1) If taxpayer gets a Savers Credit (basically for lower incomes only), the distribution could erase part or all of the credit for 3 years
2) The taxable income from the distribution could increase modified AGI above the amount for which an IRA contribution deduction is allowed