60 day rule

Submitted by lawrence rudolph on Mon, 2023-04-03 13:51

i am borrowing 1,000,000 from my ira account with the intention to pay this money back within 60days . i did this on march 1. on march 31 i was able to pay back 500,000. i am now ready to pay back the entire loan so as not to have any income tax due. am i allowed to pay this back in two shots as long as the total loan has been repaid within or before 60days



Submitted by Alan - IRA critic on Mon, 2023-04-03 14:39

  • Yes, you are allowed to return a single distribution in as many rollover contributions as you wish within the 60 day window. However, only one distribution can be rolled over within a 12 month period. Therefore, you cannot take any additional distribution from any IRA and roll back any part of it until 3/1/2024. 
  • Tax code Section 408(d)(3)(B) is copied below. You might also pull up Pub 590 -A p 23 and check the paragraph titled “Waiting Period between Rollovers”. Note that the one rollover rule applies to the distribution, not to the rollover contributions. You only received one distribution. Is your custodian giving you a problem with this?
  • “(B)LimitationThis paragraph does not apply to any amount described in subparagraph (A)(i) received by an individual from an individual retirement account or individual retirement annuity if at any time during the 1-year period ending on the day of such receipt such individual received any other amount described in that subparagraph from an individual retirement account or an individual retirement annuity which was not includible in his gross income because of the application of this paragraph.” 

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