60 Day IRA Rollover Rule
67 yo client has $105,000 Roth IRA which are proceeds from a conversion in 2004. She took a $4000 distribution in Feb of 2013. She needs to place a $60,000 deposit for a senior condo in the next 5 days. Can she take a $60,000 distribution from her IRA and redeposit it back into the Roth IRA within 60 days?
Permalink Submitted by Alan - IRA critic on Thu, 2013-05-02 19:05
Yes. as long as another rollover has not been done from this Roth in the last 12 months. Paying the deposit with 60 day rollover money is risky since a delayed closing may eliminate her chance to roll the funds back within 60 days. But since her Roth is qualified at this point, the distribution would not be taxable, she would just lose future tax free gains in the Roth if she cannot complete the rollover in time.
Permalink Submitted by Chris Hastings on Thu, 2013-05-02 22:03
If she takes the distribution and puts the money back in the 60 day window, is she allowed to receive any distributions in the following 12 month period?
Permalink Submitted by Alan - IRA critic on Thu, 2013-05-02 22:09
Yes, there is no limit on distributions that are NOT rolled over such as the Feb distribution of 4,000. The limit only applies to distributions that ARE rolled over within 60 days, for which only one is allowed per IRA account within a 12 month period.
Permalink Submitted by mk foss on Fri, 2013-05-03 16:28
There is no limit on taxable distributions from the IRA unless the individual is receiving Substantially Equal Periodic Payments over Life Expectancy. In that case, any additional distributions or rollovers to that IRA other than the prescribed income stream can cause problems.