Roth conversion
A 73 yr old client took a distribution from his IRA in Dec ’17 that far exceeded his RMD. He did so b/c he had business losses that could be used to offset ordinary income, so the distribution was effectively tax free. He deposited the distribution in excess of the RMD in his bank account. Is it too late to declare that transaction (in excess of the RMD) as a Roth conversion? If not, how does he go about declaring it as a Roth conversion, and when is the deadline for doing so?
Permalink Submitted by Alan - IRA critic on Wed, 2018-11-07 16:45
While the self certification process per Rev Procedure 2016-57 can be used to complete a rollover after the 60 day period expires, and a conversion is a rollover, use of self certification process is limited to specific reasons listed on the form. It does not appear that any of the reasons apply to the client, but you might google the Rev Procedure and review the valid reasons to see if any apply to the client. For example, one such reason is when the client states that he thought that the account receiving the distribution (his bank account) was a retirement plan. That seems like a stretch.