dmertz
Level 15

Retirement tax questions

"So what you're saying is that a rollover should include the same dollar amount of the same share name ie $901.80 of VFIAX and $1000.01 of VTSAX (that means rollover more shares  from my brokearge acccount to the Roth IRA since the market went down and same dollar amount means more shares) or to rollover less money but same amount of shares distributed?"

 

The latter.

 

https://www.irs.gov/publications/p590a#en_US_2024_publink1000230595

 

What I said was that the exact same shares that were distributed must be rolled over.  That means moving the 1.6380 shares of VFIAX and the 7.3671 of VTSAX back to the Roth IRA.  The fact that the share value has changed is irrelevant to rolling over the exact same property that was distributed, despite the fact that the Form 5498 will show a different value rolled over than the value distributed.  You'll still report it as a  rollover of the entire distribution which was valued at $1,901.81 at the time of the distribution.  Vanguard should be tracking these two share lots, so there should be no problem with this rollover.

 

I suggest that if in the future you ever need to do a return of contribution that you do it in cash by selling shares inside the IRA to have the cash in the IRA necessary to perform the distribution.  This also avoids any confusion as to whether there was one distribution or two, avoiding the complication that you are limited to rolling over one distribution in a one-year period.  In this case it appears that there was effectively a single distribution comprising amounts form two different funds allowing the entire amount to be rolled over, but this could look to the IRS as thought there were two distributions if as is typical for Vanguard that the two different funds are reported on separate Forms 1099-R filed with the IRS.