We do taxes as married filing jointly. Our income prevents direct contributions to a Roth IRA or a Traditional IRA because of IRS limits. We recently took a distribution from one of our Traditional IRAs, but later found we did not need it. It is well past the 60 day return of distribution window.
My question is whether we can treat this as a Traditional to Roth IRA conversion. We paid taxes on the Traditional IRA distribution; It seems we should then be able to contribute the same amount to the Roth IRA through Form 8606. The money was in cash, so there should not be any appreciation considerations. Also, I understand that the Roth contribution can happen at any time, but that the year it is contributed will be deemed the year the conversion takes place, and starts the 5 year rule.
The instructions for Form 8606 and all the posts I have found on the subject use taxed (often excess) contributions to the Traditional IRA as the source of the conversion money. In our case, I want to use a Traditional IRA distribution instead. Can I do this?
