I'm back......I just received this letter from my custodian. I'd prefer to share the gist of this with you if I may. I've dumbed this down quite a bit. I'm also much clearer on things. I understand dMertz you wanted more context. As this is a public forum however, I obviously cannot share everything. However, to reiterate, my question now only involves the capital gains. Pls see below. Will I be liable for paying the tax on these gains? The custodian is moving the funds back to a Roth fund for me, is my understanding.
BTW, my self certification letter has also been accepted by the custodian. Here is the gains from my mistake, from their letter.....with the context I've now provided you dMertz do you have any thoughts on how I can avoid paying taxes on the below? If I owe taxes fair enough. But I've already paid on the Roth. Thank you, dMertz.
- Short-term capital gains: $11k
- Long-term capital gains: $13k
Their letter is below
Regarding the distribution from your Roth IRA in NOV 2025, please see the details below:
- A total of xxxxx was distributed from your Roth IRA
- 90% was purchased into your NON IRA individual (taxable) account
- 10% was withheld for federal taxes and sent to the IRS
If we process the self-certified rollover and distribute the full amount from your Fund individual (taxable) account, an additional 10% will be distributed from the account than what was purchased into the account since that is the amount that was sent to the IRS for federal tax withholding.
With the self-certified rollover being accounted for with your taxes, the IRS should see an overpayment due to the 10% being sent to them. The IRS will determine any overage based off the 10% and how your actual taxes fall. The IRS should return any overpayment to you.
At that time, you can use those funds as you wish. You have the option to deposit the funds into your Equity Index Fund individual (taxable) account if you want to try and balance out the additional funds that would be distributed for a full self-certified rollover.
We have provided you with an estimate of the capital gains based off the net asset value (NAV) on February 17, 2026, if you were to complete the self-certified rollover for the full 100% from your Equity Index Fund individual (taxable) account:
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