Coronavirus eligible withdrawal from inherited TIRA

Submitted by Robert Wright on Sun, 2020-04-05 00:22

This is hard to believe.

Can you confirm this is true.

If I take a Coronavirus eligible withdrawal from an inherited TIRA in 2020, I have 3 years from the date of the withdrawal to put the money back?

So if my inherited TIRA has a value of $1,000 today and I withdrawal all of it today and don’t replace it until 3 years from tomorrow – in 2023 – my 2021, 2022, and 2023 RMDs would all be zero because I haven’t yet replaced the $1,000 I withdrew in 2020.

I would then have an RMD from this inherited TIRA in 2024 based on the 12-31-2023 value because I replaced the $1,000 in 2023.

Do I understand this correctly?

Thank you very, very much!!



Submitted by Alan - IRA critic on Sun, 2020-04-05 00:52

  • No, none of this is correct. While non spouse inherited IRA RMDs are waived for 2020, once you have taken a distribution you cannot roll it back. The reason is that distributions from inherited IRAs have never been eligible for rollover.
  • Now let’s suppose this was your own IRA, not inherited.  Distributions from your own IRA that qualify as corona virus related (CVD), can be rolled back for up to 3 years. But even if you waited 3 years, you would still have an RMD due for each year after 2020. Only 2020 is waived, and only CVDs distributed this year can be rolled back and have taxes paid over 3 years.  This process is reported as follows: You report your CVD on Form 8915B with your tax return for each year you took a CVD. Then when you roll that distribution back you must tell the custodian which year the distribution applies to. The custodian then enters the amount of the rollover, the year the distribution occurred and a code for a CVD on Form 5498 which goes to you and the IRS. The IRS has to make sense of all this which will be quite a challenge.
  • Your RMDs for 2021 and beyond will be handled as usual, which means they cannot be rolled over.

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