@David501 wrote:
Thanks Champ for your help as I have the same situation.
However, this adds another problem. I drew funds from a second account to pay the IRA back from previous withdrawals. Now I have 1099-B showing a significant capital gain. Can I avoid paying tax on that capital gain since it was all rolled into the IRA account?
Since money is fungible (meaning one dollar is the same any any other dollar and it does not matter which pocket you take it form) - if you took a RMD and then paid the same amount of money back because it is COVID related, then where the dollars came form is irrelevant.
It is the retirement amount RMD dollars that were put back - how you obtained the dollars to put back is a separate transaction totally unrelated to the RMD rollover. You simply enter in the TurboTax 1099-R section that non of the distribution was a RMD because it was not and you rolled it over.
Your separate transaction to obtain the money must be reported as a separate unrelated transaction that might have it's own tax consequences.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
