Aggregating distributions from IRA account and making one rollover contribution?

Submitted by Sarah Murphy on Wed, 2017-06-21 15:33

Hi – can multiple distributions taken from one IRA account within a 60 day window be combined to determine a rollover amount that can be placed back into the IRA account? Or does each rollover amount have to specifically correspond to one distribution amount?

Example:

Client received distribution of $5000
Client received distribution of $4000
Client received distribution of $3000
All taken within the same 60 day window – total distributions of $12,000

Can client make rollover contribution of $12,000 back into IRA (as long as within 60 day window from date of distribution)?

Thank you.



Submitted by Alan - IRA critic on Wed, 2017-06-21 17:06

  • The one rollover rule is applied by the distribution, not the rollover contribution. In this example client could only roll over one of those distributions. Conversely, if client received 12,000 in a single distribution client could roll over parts of that 12,000 on 3 different dates within 60 days since that would be only one distribution rolled over.
  • If client is in this situation, they could roll over the 5,000 distribution and convert the other 7,000 to a Roth IRA, then recharacterize the conversion back to a TIRA. This would avoid any of the distributions being taxable since a conversion does not count toward the one rollover limit.

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