Funding an IRA Rollover
Client (61 years old) used money from a Traditional IRA for a real estate transaction planning to return it within 60 days. The real estate transaction is delayed and the 60 day limit is rapidly approaching.
The client asked whether he can withdraw from a Keogh plan to return the missing money to the IRA within 60 days.
Permalink Submitted by Alan - IRA critic on Wed, 2013-05-01 22:47
Yes, if the Keogh plan allows distributions. A money purchase Keogh only allows distributions in certain circumstances. If the distribution is allowable for the type of Keogh client has, the IRA rollover can be completed, but then the problem moves to taxation of the Keogh distribution. It may not be possible to roll other funds back to the Keogh so the client would have the same problem with the Keogh taxation.Some Keogh plans also allow loans, and that would eliminate a 1099R from the Keogh plan.