Voiding/Returning a MRD

Submitted by Herm Brames on Mon, 2013-11-18 16:34

Individual attained 70 1/2 yrs. in early 2013 and took MRD based upon December 31, 2012 TIRA balance. Do IRS Regulations allow voiding that MRD transaction and returning funds to the account from which taken and then re-taking the required 2013 MRD prior to April 1, 2014? It is understood that a second MRD would need to be taken in 2014 based on the December 31, 2013 TIRA balance. There are some significant tax implications for seeking such an action.



Submitted by Jose Morales on Mon, 2013-11-18 16:56

If the withdrawal was taken in early 2013 the 60 day rollover window would have already passed, even if this wasn’t a distribution to satisfy a mandatory distribution which itself is not eligible for rollover regardless of whether you are within the 60 day rollover window.  There are no regulations that allow any distribution from an IRA account to be simply voided as if it never happened.

Submitted by Alan - IRA critic on Mon, 2013-11-18 17:44

  • I agree. If you were still within the 60 day window, I think your question would then be based on the fact that there is no RMD required to be taken IN 2013, so why couldn’t it be returned and taken in 2014 before the RBD? The reason this won’t fly is stated in the IRS Reg copied below. The Reg states that if an RMD is required FOR a year, distributions taken in that year are considered RMDs up to the RMD amount. The key is that an RMD is defined based on FOR a year, not necessarily IN the year. 
  • IRS Reg 1.408-8, Q–4. What portion of a distribution from an IRA is not eligible for rollover because the amount is a required minimum distribution?A–4. The portion of a distribution that is a required minimum distribution from an IRA and thus not eligible for rollover is determined in the same manner as provided in A–7 of §1.402(c)–2 for distributions from qualified plans. For example, if a minimum distribution is required under section 401(a)(9) for a calendar year, an amount distributed during a calendar year from an IRA is treated as a required minimum distribution under section 401(a)(9) to the extent that the total required minimum distribution for the year under section 401(a)(9) for that IRA has not been satisfied. This requirement may be satisfied by a distribution from the IRA or, as permitted under A–9 of this section, from another IRA.

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