60 Day IRA “Loan” Clarification

Submitted by Tom Payne on Fri, 2015-09-25 08:38

My client is taking a distribution from his IRA on two different days — 100 grand today and 50 grand tomorrow. His plan is to pay back the two distributions in total (150 grand) on one day (with one check) within 60 days from now. Does this count as ONE or TWO rollovers?



Submitted by David Mertz on Fri, 2015-09-25 12:50

  • This would be TWO rollovers, in violation of the one-per-12-months rule.  The rule limits the number of *distributions* that can rolled over in a 12-month period.
  • Only one of these is permitted to be rolled back to a traditional IRA.  The other could be converted to a Roth IRA or rolled over to an employer’s qualfied retirement plan without violating the rule since Roth conversions and rollovers to qualifed retirement plans are disregarded with respect to the one-per-12-months rule.  Of course rolling to a Roth IRA would be taxable.


Submitted by Alan - IRA critic on Fri, 2015-09-25 17:05

Obviously, he needs to arrange for a single distribution of 150k to avoid the rollover limitation. But if two distributions cannot be avoided, he could convert one of them to a Roth IRA within 60 days as DMx indicated, then later on he could recharacterize that conversion back to a TIRA and he will have avoided the second rollover with this extra step. 



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