Coronavirus-Related Distributions ("CRD") | Ed Slott and Company, LLC

Coronavirus-Related Distributions ("CRD")

Is it possible for a qualifying individual that takes a "CRD" from his/her 401(k) and/or T-IRA to repay the distributed amount (up to $100,000) to a Roth IRA?

This could be beneficiary on two counts (1) account values have declined due to market volatility and (2) taxes could be (equally) over 3 years (as opposed to one year)

Thank you

As I read the CARES Act provision, this cannot be done. The eligible retirement plans to receive rollover contributions do not include 408A (Roth IRAs), just TIRAs under 408(d)(3) or pre tax employer plans.

not filing an amendment return and insted deposting the proceeds into a traditional IRA (as basis) and then converting it diretly to a Roth (large back door roth) - Assuming there are no other IRA's the transaction would be tax free!

Yes, once the amounts are rolled into a TIRA, they could be converted under the existing rules. But the rollover to the TIRA would not constitute IRA basis unless the original distribution consisted of post tax money. If not, the conversion would be taxable in the year of the conversion.

 

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