Interesting little situation here I have not come across before.

Client max funded Roth IRA ($6,500) during the 2015 tax year. Naturally, upon drafting out the 2015 tax return, his MAGI fell in between the $183K – $193K phase-out range. The excess contribution amount, let’s call it $1,000, less an associated loss of $80, was withdrawn (not recharacterized).

All good and 2015 return still not filed. However, client recently received an unexpected K-1 which has a substantial loss taking his 2015 MAGI well below the $183K MAGI limit – so the original contributions were in fact all eligible.

Now the question is, prior to 4/18/2016, is the client allowed to contribute the $920 that was withdrawn for 2015, or would it be the original contribution amount of $1K?

I know with a proper excess contribution withdrawal it is as if the original contribution was never made. However, because this was not technically an excess contribution withdrawal, it may be coded as a normal distribution in which case he may only be able to move $920 back into the Roth.

Appreciate any guidance on this – happy to provide more information if needed.