60-Day IRA Rollover
I know that the owner can only make one 60-day rollover per 365 days regardless of the number or type of IRAs owned.
How does the this rule apply when the owner withdraw funds multiple IRAs on the same day? Here, the owner took a distribution from 3 separate IRAs (i.e. different custodians) on the same day – Can he/she rollover the total amount ($150,000)? If not, what are the rollover ordering rules?
Traditional IRA #1 ($100k)
Traditional IRA #2 ($35k)
Roth IRA #3 ($15,000)
Permalink Submitted by Alan - IRA critic on Tue, 2024-04-02 18:14
Since there were 3 accounts and there will be 3 1099R forms, these are separate distributions. While a rollover to a qualified employer plan or a conversion to a Roth IRA do not count against the one rollover limitation, these two options will be required in order to roll over the entire 150k. There is no ordering requirements, only the 60 day deadline.
If there is no employer plan to accept one or two rollovers and avoid a taxable distribution, a conversion is the only other outlet, and a conversion will be taxable. In such a case, the 100k distribution could be rolled back or to another TIRA, and the other 50k could be converted, which would result in taxes due, but no penalty.
This situation might have been avoided if the IRA owner took a series of small distributions as needed that would avoid rollovers.