roll back of IRA RMD

Submitted by Howard Hook on Wed, 2020-08-19 20:25

If someone wants to return their RMD back to their IRA account does it have to be done in cash or can it be done via in-kind transfer of shares of investment?

Taxpayer has highly appreciated stock that they would prefer using rather than rolling back cash.

Thanks
Howard



Submitted by Alan - IRA critic on Wed, 2020-08-19 21:44

  • Like all IRA to IRA rollovers, the property that was distributed must be the property that is rolled over. If an in kind distribution was made, the same shares must be rolled back. Share value changes after the distribution are immaterial. If cash was distributed, then cash must be rolled back.
  • Note that if shares were distributed and rolled back, the 1099R and the 5498 will not show the same value and in that case an explanatory statement should be included with the tax return reporting the rollover indicating the number of shares distributed and rolled back and confirming that only the amount of the RMD was rolled back. Chances are that the exact amount of the RMD distributed in shares would have to include partial shares or some cash, and if so that would have to be taken into consideration in determining what is rolled back. Deadline is 8/31.


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