60 Day Distribution Re-contribution Rules
A Client over age 60 takes $150,000 distribution out of his SEP IRA from Trustee/custodian (1) and within 60 days wants to deposit $150,000 into a Traditional IRA held at another Trustee/custodian (2).
1. Does it make a difference that the funds are deposited into an IRA and not another SEP IRA?
2. Is it a problem with different Trustees in complying with the 60 day rule?
Rick
Permalink Submitted by Alan Spross on Mon, 2012-11-12 23:56
1) No difference whether returned to the same account or to another account with a different custodian.
2) It’s up to the taxpayer to complete the rollovers within 60 days. It’s possible some staff of IRA custodians do not understand the rules. In this case, the client rolled over a distribution and there is a one rollover limit per 12 month rolling period. Therefore, the client must be careful for the next 12 months not to take another distribution with the intent of rolling it over from the IRA that received this rollover OR from the SEP IRA if it still has a balance.