60 Day Rule

Submitted by James Arnold on Wed, 2016-12-07 23:57

Can somebody over the age of 70 1/2 take money out of their IRA or Roth IRA and put it back in within 60 days and not be taxed on that amount?

Does the 60 Day rule apply to somebody over age 70 1/2?

Permalink Submitted by Alan - IRA critic on Thu, 2016-12-08 01:06

The 60 day rollover deadline does apply, but if the RMD for the year FOR THAT IRA account only has not been completed prior to this distribution, the distribution will be applied to any RMD amount remaining for that account, and that portion will not be eligible for rollover because it is RMD money. If it is rolled over in error, it becomes an excess IRA contribution subject to correction. Of course, Roth IRAs for owners are not subject to RMDs so rollovers of Roth IRA distributions are not complicated by RMD considerations.
However, remember that there is also only one rollover permitted for all IRA types in a 12 month period. Therefore, the number of these rollovers is limited in addition to the time limit for each distribution to be rolled over.