Reply To: Reporting redeposited 2020 RMD

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Kaye Thomas

As to your first question, the IRS has long allowed a return of money to the same IRA from which it was distributed to be treated as a rollover, if other requirements are met. The new wrinkles here are that taxpayers were allowed more than 60 days to return the money, and it doesn’t count for purposes of the rule limiting taxpayers to one rollover per year.

As to your second question, I understand the following happened: First, you took your RMD distribution, then you converted the IRA (or the part invested in this fund) to a Roth, and then, by August 31, you returned the money or assets to the same fund, which is now a Roth IRA. In that case, the amount you took as RMD distribution should be treated as a Roth conversion. It’s taxable because it ended up in a Roth, not a traditional IRA, but it’s a permissible transfer to a Roth because it was eligible for rollover.