Can an IRA distribution be moved to a Roth IRA | Ed Slott and Company, LLC

Can an IRA distribution be moved to a Roth IRA

I took an IRA RMD this year more than 60 days ago, so apparently I can roll this back to my IRA.

Is there anyway to take this distribution and convert it directly (or indirectly) to a Roth IRA

Is there any chance the IRS will relax the 60 day rule (I missed by only a few days)?

If the distribution was over 60 days ago you cannot roll it back unless it qualifies as a corona virus distribution. There are other threads here that go into the requirements of a corona virus distribution, but as far as I can tell, a Roth IRA is not allowed to receive a corona virus distribution as a conversion.

What if I take a qualified CVD in November and realize I don't need it come December, can I convert to a Roth since I'm still within the 60-day window under standard rules?  Or will the qualified CVD coding on my 1099 prevent this?

  • We don't know yet how the IRS will decide to track this, but since the natural disaster distribution model is already in place from past natural disasters, it appears that Form 8915 B or similar will be filed by the taxpayer, and used to enforce the 100k limit, whether taxes are paid in one or 3 years, penalty waiver, amounts repaid, etc
  • Therefore, I think that if you do not claim any portion of your TIRA distribution as a CVD, you should be able to convert it and not report it as part of your 100k limit since it will not be a CVD. 
  • Note that a Roth IRA is not included in the list of eligible retirement plans for CVD rollovers, and that is why it is important to not have your conversion reported from a CVD distribution. Unless the IRS changes it, the TIRA custodian will not code any distribution as a CVD on Form 1099R. The taxpayer self reports all this on Form 8915B. Of course, that means that you cannot pay the conversion taxes over 3 years, but that may be one of the reasons that Roth IRAs were not shown as eligible retirement plans for rollbacks.

 

 

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