Conoravirus Related Distribution
I recently heard that should a qualified individual takes a CRD from Roth funds they are ineligible to rollover (repay) the funds. Wheres non Roth-Roth can be rolled over up to 3 years later
Is this correct? If so, I am surprised that it’s not being covered more.
Thank you
Permalink Submitted by Alan - IRA critic on Fri, 2020-12-04 18:47
A CRD from a Roth IRA can be repaid to a Roth IRA within 3 years. Roth IRAs are eligible retirement plans for both distribution and repayment of CRDs. However, a CRD from a TIRA cannot be repaid to a Roth IRA (a conversion) because such a transaction is not a non taxable transfer (exception may apply if the TIRA is 100% basis). This is pointed out in Notice 2020-50. Apparently, some people have already done such conversions and will find out that there is no way to report them on Form 8915 E when it is released. The result of this would be a failed conversion to be treated as an excess regular Roth IRA contribution subject to a corrective distribution.