IRA Distribution Payback??
I have a client, who is 46, who needs to take 75k out of his 150k IRA for business needs. I realize that there is a 10% early withdrawal penalty and subsequent taxes on a premature distribution. My question is, if he gets some money to come in, can he repay the $75K to his IRA within 60 days and avoid these penalties. I could have swore I read somewhere that Ed said there is a loop hole of sorts in order to get this gone.
Thanks
Permalink Submitted by Alan - IRA critic on Thu, 2017-04-27 00:01
The IRS frowns on using IRA money for temporary loans, and that is why they have now limited the number of 60 day rollovers to just one for the total of a person’s IRAs. But as long as the client did not do an earlier 60 day rollover in the prior 12 months, he can do one now, then not be able to do another for the next 12 months. Partial rollovers are treated as full rollovers in the event client is able to replace just a portion of the 75k.