@cjob wrote:
Thank you Wendy. Yes. I'm not seeing any reason why I can't consider part of the re-contribution to be deductible IRA and part be designated as "repayment". Basically, just looking for other thoughts since I thought it odd not to have been addressed to date. What is very odd to me is the different treatment by TT when I change which contributions I designate as repayment and which as deductible IRA....
That all said, it's a moot point currently since I believe if I let the excess 2020 "repayment" rollover to 2021 I will benefit by reducing the TI in a higher tax bracket year. So even considering time value of money, letting it rollover as opposed to being a 2020 deductible IRA contribution yields a significantly better result.
If you elected to repay it over a 3 year period then it is a *repayment* that is different from a contribution.
Repayments or any other money form a tax deferred retirement account cannot be used as a new IRA contribution.
Of course you can repay the money to the IRA and also use other taxable compensation (money that you worked for) to make a separate IRA new contribution that might be deductible if your AGI allows a deduction.
They are different things.
**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.**
