Indirect IRA rollover
If I take an indirect rollover in Dec 2016 after I have already taken my 2016 total RMD, can I deposit the entire rollover funds into another IRA in Jan 2017 before I satisfy my 2017 RMD?
If I take an indirect rollover in Dec 2016 after I have already taken my 2016 total RMD, can I deposit the entire rollover funds into another IRA in Jan 2017 before I satisfy my 2017 RMD?
Permalink Submitted by Alan - IRA critic on Wed, 2016-12-07 22:09
Yes, you can. The distribution in 2016 was not an RMD because you completed that earlier. And you can roll it over because that is not a distribution, it is a contribution. However, for purposes of calculating your 2017 RMD you must ADD the amount to be rolled over to your year end 2016 balance. This rule is called “oustanding rollovers and recharcterizations” and prevents a taxpayer from reducing RMDs by temporarily reducing the year end balance on which the following year RMD is calculated.