Excess Contribution / In Kind Distributions
I have a client that has made excess contributions to their Trad’l IRAs and Roths for 2012. Can someone confirm whether they would be permitted to make excess distributions out in the form of stock or mutual fund, with the same stock / mutual funds back in for 2013 contributions (assuming values are within limits and custodian otherwise permits)?
thanks in advance
pf
Permalink Submitted by Alan - IRA critic on Mon, 2013-03-04 19:50
The corrective distribution can be made with securities, but the amount must be exact and not all firms distribute fractional shares. There might have to be a small amount of cash distributed to get the amount exactly correct if fractional shares are not permitted. Subsequent new contributions must be 100% cash however.