Reversing a voluntary contribution from a Traditional Rollover IRA

Submitted by Joseph Salkowitz on Mon, 2016-09-19 01:44

Is it possible to withdraw or reverse a contribution (voluntary) to my IRA so as to keep all monies in the IRA the same category, that is, all taxable to avoid doing ratios when starting distributions?
I successfully re-characterized the monies from the Roth and now want to reverse the first step of the voluntary contribution to the IRA.



Submitted by Alan - IRA critic on Mon, 2016-09-19 02:20

  • See other post. Now that I see you have already recharacterized the original contribution type, you can still request that the contribution be returned to you with allocated earnings. Any earnings returned with the contribution will be subject to tax and penalty if you are under 59.5.
  • Apparently you contributed first to a Roth IRA and then recharacterized the Roth contribution as a TIRA contribution. You can still request that the TIRA contribution be returned to you. If this is a 2015 contribution the deadline to have it returned is 10/17/2016. Earnings being returned to you are taxable in the year IN WHICH you made the original Roth contribution. You may also have to amend your 2015 return if it does not reflect the final result.


Submitted by Joseph Salkowitz on Mon, 2016-09-19 17:29

Thank you.  The custodian is using a distribution form, which concerned me. They tell me my accountant will handle it as a reversal of funding and won’t need to be prorated  coming out of the TIRA.



Submitted by Alan - IRA critic on Mon, 2016-09-19 18:10

A return of contributions is a distribution along with the allocated earnings. However, be sure the form lets you identify a specific year’s contribution to be returned, rather than just an undivided portion of the total account. Such a distribution is coded differently on the 1099R form you will receive the following January. This type of corrective distribution is NOT subject to the pro rate rules on Form 8606 and an 8606 is not used to report it. Sounds like you are OK here.



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