My MIL used part of her RMD ($60k) to do a Roth conversion ($27k) TT alerted me this is not allowed. Heres what happened:
Q4 2022
~60k RMD (taxable regardless)
~33k taken as cash
~27k converted to Roth (IRS does not allow you to convert your RMD)
Q1 2023
Vanguard took ~26k (their corrective calculation) out of the Roth and gave it back as cash (to meet her 2022 RMD requirement). VG will not give her any tax info about this “reversal” until the end of 2023.
It appears none this will actually affect the amount she owns (she pays taxes on the RMD but not on the conversion or the “reversal”).
Since this was corrected before the tax deadline does she need to report this? if yes then how does she report this? Form 5329?
thanks!
