60-Day Rollover scenario
TP withdraws $17,000 for the downpayment on a house, and a few weeks later, withdraws $179,000 for the closing. Given the once-per-12-month rule, can TP choose to base the 60-day rollover window on the second of the two withdrawals and re-deposit $179K within 60-days of that withdrawal and treat the $17k as a taxable distribution? Or since both withdrawals were within 60 days of one another, the clock starts on the first withdrwal and is limited to that withdrawal only within the 60-day window?
Permalink Submitted by Alan - IRA critic on Thu, 2017-04-13 18:25
Was this a qualified first home purchase? And was the closing delayed or did it fall through?
Permalink Submitted by Alan Schapire on Thu, 2017-04-13 21:06
No to both questions. Just timing issues on sale of home and purchase of new home.
Permalink Submitted by Alan - IRA critic on Thu, 2017-04-13 21:33
OK, that eliminates the more beneficial options. But the answer to your original question is a conditional Yes. As long as 60 days has not passed from the date of receipt of the 179k, the 17k has not been rolled over, and there were no other rollovers from any owned IRAs in the last 12 months, the 179k can be rolled back even though it was distributed last. Further, if TP also wants to roll back the other distribution, it can be converted to a Roth IRA within 60 days of distribution and the Roth conversion later recharacterized back to the TIRA because conversions do not count toward the one rollover limitation.