RMD IN KIND WITHDRAWAL AND ROLLOVER UNDER CARES ACT | Ed Slott and Company, LLC

RMD IN KIND WITHDRAWAL AND ROLLOVER UNDER CARES ACT

I took and in kind distribution from my IRA of a bond )$10,000 par value), valued on the date of the withdrawal at $10,100.00 and got credit for the $10,100.00 withdrawal. When the CARES Act was announced I rolled over the exact bond back into my IRA but it was then trading at $9,900.00. The value of the bond had declined by $200.00. Am I allowed to make up the difference with a cash check into my IRA of $200.00 and how would it be classified by the brokerage. If I can't put back the $200.00 I would not be made whole.

You cannot replace the 200 loss, but you will report a distribution of 10,100 and a full rollover on Form 1040, line 4 a and 4b. That leaves you in the same position as if you had never taken the distribution since the value would have declined either way. The CARES Act did not influence this unless the distribution would have been part of your RMD, by eliminating 2020 RMDs and allowing the distribution to be rolled over.  Fortunately, you did not sell the bond outside the IRA since you would then not have been able to complete the rollover.

 

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