60 day rollover
I took a distribution from my IRA, and deposited it back within 60 day. My understanding is this is only allowed once a year. What if I take another distribution from my IRA within the 12 months, is there a way to undo it? If not, I believe the 2nd distribution will be considered as taxable income to me, correct? Thanks!
Permalink Submitted by Alan - IRA critic on Wed, 2025-04-16 13:32
Yes, that is correct.
But if you are stuck with a taxable distribution, you might as well convert it to Roth, since conversions are not subject to the one rollover limitation and there is no 10% penalty on conversions.
Another option which will avoid taxes entirely is to roll the second distribution to your employer plan if you have access to the employer plan and it accepts IRA rollovers.