I mistakenly rolled over a death benefit from a variable annuity to my traditional IRA. (No mechanisms to prevent that apparently.) I also have an inherited IRA and in December I took (more than) the RMD for 2021, as a function of my mother's age at the time of her death last year. Is there any way for me to avoid double taxation on the ineligible rollover? Anything I can do with that inherited IRA that would help here given that there's still over two months left before April 18?
Otherwise, my reading of IRS publications suggests I need to do a Corrective Distribution (distribution code 😎 from the Traditional IRA for tax year 2022 which will cause double taxation of the rolled over amount. The variable annuity benefit came with its own 1099-R with income to be reported on my 2021 return and with distribution code 4D, thus preventing rollover of that amount.
