2009 RMD
Taxpayer, greater than 70 1/2 in 2009, is not required to take a RMD in 2009 (all RMDs are waived for 2009). Nevertheless, taxpayer, at my direction, takes IRA distribution on 12-29-09 ($45,000) and has the entire amount withheld as federal income tax to eliminate an estimated tax penalty. $45,000 was redeposited to the same IRA on 1-14-10. Broker reports $45,000 IRA distribution on 2009 1099-R and the gross was reported on the taxpayers’ 2009 tax return but the taxable amount reported was none, because the taxpayer rolled over the entire distribution within 60 days of receipt. The taxpayer did not have any other rollovers in 2009, 2010 or 2011. Does anyone see any reason that the IRA distribution should be taxable (or any other potential problem) ?
Permalink Submitted by Alan Spross on Tue, 2012-05-08 22:31
The only thing that would derail that tax free rollover treatment would be a situation where the taxpayer rolled over another distribution to or from this IRA account in the period of 12/30/08 to 12/29/09. That would have made the 09 distribution ineligible for rollover under the one rollover per 12 month period limitation.
If the above situation did not occur, the other issue is that taxpayer had an outstanding rollover on 12/31/2009 when the IRA is valued for purposes of determining the 2010 RMD. To properly determine the 2010 RMD, the actual 12/31/09 balance would have to be increased by 45,000 to reflect the value that was not in any IRA as of year end.
Permalink Submitted by chris shamel on Tue, 2012-05-08 22:33
Thank you, Alan.
Permalink Submitted by mk foss on Tue, 2012-05-08 22:45
I heard Natalie Choate discuss this technique a few years ago. She suggested that the rollover within 60 days be placed in a different IRA – but did not indicate that there was a problem in returning it to the IRA where it originated.
Permalink Submitted by teragoldsan Worthington on Wed, 2012-05-09 00:28
modern wrought iron chandelier comes well together with your foyer decor. The particular wall membrane color along with[url=http://www.bestwowgolds.com]cheap wow gold[/url]
lobby furniture must be considered. When you have[url=http://www.bestwowgolds.com]wow gold[/url]
classic selections within your foyer, a wrought iron chandelier along with classic conclude could be the one for you! Precious metal home chandeliers offer a elegant look for your foyer, while, silver precious metal or perhaps opera conclude can give a much more informal[url=http://www.bestwowgolds.com]Homepage[/url%5D
effect!