Another 60-Day Rollover Question – Bridge Loan
I have a client that needs to have money sent to a title company from her IRA to cover the purchase of a new house. Her HELOC won’t be available till a week after the close, which is why she needs the money now.
Reading the IRS rules, it says that the clock starts when she receives the money. If it goes to the title company, would she still be eligible for the 60-day rollover? Ideally, she would have the distribution sent to her bank, then to the title company, but the deadline won’t allow for that to happen so it will have to go directly to the title company.
Any insight would be appreciated!
Permalink Submitted by Alan - IRA critic on Wed, 2024-07-10 18:34
She would still be eligible regardless of where the distribution is directed. The 60 day period starts on the day after the date the distribution is constructively received by the taxpayer or where the taxpayer directs the distribution and the period ends when the rollover contribution is received by an IRA or other qualified plan.
Of course, client must not a rolled over a prior distribution received in the last 12 months or client is not eligible for another 60 day rollover. Missed deadlines related to a real estate or loan closing is the leading reason for missing the 60 day deadline.