Question
RMD 2020 partially returned
A client took his 2020 RMD before knowing he didn't have to. The stocks sold to do this had lost value by the time he repurchased them (down by $8,055) so he thinks he shouldn't have to pay tax on the difference since he sold/then purchased back (not within 30 days) the same # of shares of same stock.
I've explained that the IRS would no longer have the opportunity to tax that $8,055 (since already lost), it is taxable. Is there something else I can refer him to to support my thinking? He has received the 5498 showing the contribution. Should I show the original distribution as all taxable (since it's coded that way on the 1099), or can I use the rollover code for all but the 8055?
