What IRA balance for RMD if Rollover came back Jan 4
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.
Permalink Submitted by Alan - IRA critic on Tue, 2021-03-23 17:08
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.