I have a client who withdrew $20k from her IRA in Jan 2020 to take care of a home she was selling. She did not have an advisor so she had no idea she could put the 20k back into her IRA as a 60 day rollover.
She also took her RMD for 3k in Jan 2020.
Her health was not effected by the COVID
This is what I read below concerning the Cares Act:
On June 23, 2020, the IRS issued Notice 2020-51. This notice has granted additional rollover relief for IRA owners who previously had taken a now-waived RMD in 2020. A summary of the provisions are discussed below.
Waiver of one IRA-to-IRA rollover per year for RMDs:
If your client’s RMD was withdrawn in multiple distributions in 2020 from their IRA, they may now repay all those distributions into their IRA as long as the repayments are made by August 31, 2020. Normally they are limited to one IRA-to-IRA rollover in a 12-month period.
Easing of the 60-day deadline to complete IRA-to-IRA rollovers:
Any RMD amounts that have already been withdrawn in 2020 are eligible to be rolled back into your client’s IRA. The funds must be returned by August 31, 2020, to your client’s IRA.
it seems by the above that she can return (rollover) the whole 23k back into her IRA by August 31st and not be taxed.
1. Is she allowed to rollover the 20k back into her IRA and not be taxed for it?
2. Can she include her 3k RMD with the rollover?
3. is she not allowed to do any rollover any longer and she must pay the taxes on the 23k?
Thank you for any help,