Distribution after Indirect Rollover
We have a client that took a distribution of $150,000 late January from his IRA. This represented his entire RMD with the exception of $50,000 held back for QCD’s. He had check writing capability on the IRA and he wrote his $50,000 of QCD’s that cleared this week. However, he also accidently wrote 2 checks from his IRA checkbook to his wife and child for $20,000 a piece so he has now taken $40,000 more than his RMD by accident – both of these checks cleared on separate days. I know you can not do an Indirect Rollover for distributions taken on separate days (https://irahelp.com/slottreport/60-day-rollovers-and-multiple-checks) but can we still roll back in $40,000 of the “original” distribution of $150,000? We are inside the 60 Days, but I am not sure if the checks that cleared between the $150,000 and now make it impossible to roll a portion of that distribution back in.
Permalink Submitted by Alan - IRA critic on Tue, 2022-03-08 16:27
Is the custodian applying the check clearing date to the one rollover limitation, or is this your interpretation? Granted, check writing receipt dates for IRA owner issued checks differ from receipt dates of a custodian issued check, but did wife and child have constructive receipt of these checks on the same date even though they cleared on different dates?
Permalink Submitted by Ben Braxton on Tue, 2022-03-08 17:05
They had constructive receipt on different days and the checks were dated different days. I guess the real simple way to ask my question is that if you take a distribution from your IRA that you plan to roll back in in 60 days, can you take distributions you dont plan to roll back in within the 60 day period? Or can you only roll back in your last distribution?