60 Day Rollover
Client has not completed a 60 day rollover ever and is age 62.
He took a distribution from his IRA on 4/20/18 for $40,000(gross) and took a distribution on 5/15/18 for $20,000(gross) totaling $60,000(gross). He will be coming into some unforeseen funds in coming days. Can he rollover(via 60 day rule) the entire $60,000 since 60 days has not elapsed? I assume yes but since 2 distributions occurred I don’t know if this poses a problem.
Permalink Submitted by David Mertz on Thu, 2018-05-31 02:06
The one-rollover-per-year rule is based on the number of distributions. Rolling over any of the $40,000 distribution will preclude the rollover of any of the $20,000 distribution (or vice versa), so the maximum amount that can be rolled back to a traditional IRA is $40,000. The second distribution can instead be rolled over to an employer’s qualified retirement plan if the client has one that will accept the rollover. The client can also convert the second distribution to a Roth IRA since Roth conversions are not subject to the one-rollover-per-year rule. (Once converted to Roth, the conversion cannot be recharacterized back to a traditional IRA.)