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Nemo90
Level 1

IRA withdrawal

We withdrew $15000 in December from an IRA and had the money wired in to our bank account. We then purchased an IRA CD for $7000. We are  thinking about buying another $3000 in January before the 60 day limit expires. How will the difference in tax years be handled.  

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Accepted Solutions
dmertz
Level 15

IRA withdrawal

The difference in the years that the rollover contributions are made is irrelevant to how you report this on your tax return.  You'll simply report that $10,000 was rolled over.

 

The only real difference is that the $7,000 rollover contribution will be reported on the 2020 Form 5498 for the IRA CD receiving the $7,000 rollover and the $3,000 rollover will be reported on the 2021 From 5498 for the IRA CD receiving the $3,000 rollover.  Although the IRS is generally accustomed to seeing rollovers that are not completed until the year following the year of the distribution, be prepared with supporting account statements that show the distribution and contribution dates in case the IRS asks about it.

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2 Replies
dmertz
Level 15

IRA withdrawal

The difference in the years that the rollover contributions are made is irrelevant to how you report this on your tax return.  You'll simply report that $10,000 was rolled over.

 

The only real difference is that the $7,000 rollover contribution will be reported on the 2020 Form 5498 for the IRA CD receiving the $7,000 rollover and the $3,000 rollover will be reported on the 2021 From 5498 for the IRA CD receiving the $3,000 rollover.  Although the IRS is generally accustomed to seeing rollovers that are not completed until the year following the year of the distribution, be prepared with supporting account statements that show the distribution and contribution dates in case the IRS asks about it.

View solution in original post

Nemo90
Level 1

IRA withdrawal

Thank you for your help. It was what I needed. 

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