Rollover to wrong account
Hello,
I have a client that received a rollover check in 2015 that was deposited into their IRA rollover account. The client was informed recently that the funds should have been rolled over to a Roth IRA. The client has worked with the accountant who confirmed that they can move the principle to the Roth. Would a Roth conversion be the best way to move the funds? Our custodian does not track basis on retirement account so it would be up to the client to track the basis.
I just have not seen an example where we are moving funds that were rolled over years ago. Any guidance would greatly appreciated. Thank you.
Permalink Submitted by Alan - IRA critic on Wed, 2022-09-14 15:46
What type of account was the 2015 distribution from? Who informed the client 7 years later that an error was made? If a custodian error was made that long ago, they are not going to attempt to fix it at this late date after all tax reporting as been completed and those tax years are now closed. Of course, the client can always convert a TIRA to Roth, but that would be taxable other than the amount of IRA basis recorded on Form 8606 that would be allocated to the conversion. More info on the original error is needed to be more specific.