60-day IRA Payback Rule
Looking to take $130k gross withdrawal ($100k net) from an IRA owned by the husband to purchase a new home prior to the old house selling. When the old house sells, would like to put back the money into the IRA to avoid a taxable withdrawal. If this is looking to take more than 60-days, could the wife take a WD from their IRA to use to repay the husband’s IRA, and then a new 60 day clock would start on the wife’s IRA withdrawal? Is this a feasible strategy? Any issues with it?
Permalink Submitted by Alan - IRA critic on Wed, 2024-01-03 18:31
Yes, the wife could take a distribution from her IRA to complete the rollover of his IRA distribution. However, any plans to complete a rollover based on a real estate closing is always risky and could lead to them having to cut the price on the former home to avoid tax and perhaps penalty by meeting the 60 day deadline for the second rollover.