I took a big chunk of stock out of IRA Dec 30 then got cold feet and did a Same Property Rule 60 day Rollover Jan 4. Fidelity calculated RMD on Dec 31 balance (too low). Can I just add the dollar value of stock I took out on Dec 30 to Dec 31 balance and compute RMD on that? Note the value of stock put back changed and there were dividends that I plan to ignore.
So you are saying compute the value of the stock on Dec 31 (not Dec 30 when rolled or Jan 4 when returned) and add that value to what was in IRA on Dec 31 and add the dividends received when out of IRA. Correct?
No. Add back the value of the shares on the day you rolled them back (1/4). That value is also the value the custodian will report on Form 5498 as a 2021 rollover contribution, but that form will not be issued until May, 2022. However, the value should show on your IRA statement as a rollover contribution done 1/4. Your 2020 1099R will show the value of the distribution on 12/31. That goes on line 4a with 0 on 4b and “rollover” on the line next to 4b.
There is no clear IRS guidance on the dividend. DId you get a 1099 DIV reporting them, which would be 2020 income because they were declared in 2020, even though paid in 2021?
Permalink Submitted by Alan - IRA critic on Tue, 2021-03-23 17:04
There are IRS Regs which address “outstanding rollovers” for RMD computation purposes. The applicable Reg is 1.401(a)(9)-7, QA 2. The requirement is that the balance in the distributing account be increased by the amount (value) rolled over (or in this case back). The intent is to use the value that would have existed at year end in your IRA had no distribution taken place in the first place. The IRA custodian will issue Form 5498 in Jan, 2022 showing the value of the shares rolled back and that is the amount by which your year end balance for RMD purposes should be increased. If you did not roll the dividends back, any 1099 DIV you receive will have to be reported as taxable dividends. Finally, note that you cannot do another 60 day rollover for 12 months from the distribution date of the recent IRA distribution.