topic Excess Contributions - Converted a RMD to Roth! in Retirement tax questions

Excess Contributions - Converted a RMD to Roth!

osme02 — Tue, 24 Feb 2026 03:34:27 GMT

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!

Re: Excess Contributions - Converted a RMD to Roth!

SharonD007 — Wed, 08 Mar 2023 18:07:11 GMT

See dmertz's solution.

Edited 3/8/23|10:05am PST

@osme02

Re: Excess Contributions - Converted a RMD to Roth!

dmertz — Tue, 07 Mar 2023 21:18:46 GMT

The Roth conversion of the RMD is a failed conversion and constitutes a regular contribution to the Roth IRA which was subsequently returned. To get 2022 TurboTax to include the required explanation statement with you MIL's tax return you can enter the 2023 code JP Form 1099-R that your MIL will be receiving next year. This Form 1099-R will have $26k in box 1, $0 in box 2a and codes J and P in box 7. When 2022 TurboTax asks, be sure to indicate that it's a 2023 Form 1099-R. Because there was a loss in value, the taxable amount of $0 is not subject to any penalty. After entering this Form 1099-R, TurboTax will prompt for the explanation where you'll provide the same details that you provided with the question that you posted here. Because the excess contribution was properly corrected before the due date of the tax return, no Form 5329 is required.

When your MIL actually receives the code-JP 2023 Form 1099-R next year she can ignore it because the explanation provided with the 2022 tax return takes its place.

Re: Excess Contributions - Converted a RMD to Roth!

dmertz — Tue, 07 Mar 2023 21:24:08 GMT

The reply provided by @SharonD007 is a incorrect. It's completely unnecessary to make the entry SharonD007 describes because (if done correctly as I will describe) it would serve only to document the transactions in the TurboTax tax file and would have no effect on the filed tax return). If you do make the entry, the amount to indicate as the amount of contribution withdrawn is $27,000, not $26,000.

Re: Excess Contributions - Converted a RMD to Roth!

osme02 — Tue, 07 Mar 2023 23:21:45 GMT

Thank you both for your responses to my issue. @SharonD007 can you comment on what dmertz is suggesting?

Re: Excess Contributions - Converted a RMD to Roth!

SharonD007 — Wed, 08 Mar 2023 18:24:46 GMT

dmertz's solution works.