Taxes
I have a client that did a conversion for 100k in March. We withdrew another 26k in December and had it withheld to pay the taxes. Is there a way to get the money back into the IRA or into a Roth in 2013?
I have a client that did a conversion for 100k in March. We withdrew another 26k in December and had it withheld to pay the taxes. Is there a way to get the money back into the IRA or into a Roth in 2013?
Permalink Submitted by Alan - IRA critic on Mon, 2012-12-31 17:11
Yes, if the 26k is replaced by other funds within 60 days of the distribution, it will be considered a completed rollover. If the rollover is made to a Roth IRA, it will be another taxable conversion for 2012 because the distribution was taken in 2012. If client wants to avoid this second 2012 conversion, he could roll the 26k back to the TIRA and then convert from the TIRA in 2013. That way, the second conversion will be taxed in 2013 instead of 2012. I assume he is not subject to RMDs and also has not done another indirect 60 day rollover within the last 12 months from this IRA.