non-qualified TIRA distribution
I have a client who is taking a non-qualified distribution from her TIRA. She wants to put some of the distribution back within the allowed 60 days, but not the entire distribution.
Can this be done and if so, does she only pay tax and penalty on the remaining amount of distribution.
Thank you for the help.
Kirk
Permalink Submitted by Alan Spross on Thu, 2008-04-17 20:50
Yes, she can roll back all or any part of the distribution within 60 days and taxes would avoided on the amount rolled back. However, the client should be aware of the one rollover per rolling 12 month period requirement per IRA. If she had already used up that rollover, she could not do another for 12 months. Likewise, if she does one now, there can be no more rollovers from or into that particular IRA account for another 12 months. Of course, direct transfers do not count as rollovers, so there is no limit on the number of these that can be done.
Permalink Submitted by Kirk Halveland on Fri, 2008-04-18 14:42
Thank you. Just to clarify, no rollovers for 12 months would also include any custodian to custodian rollovers from a qualified plan; right?
Permalink Submitted by Al Fry on Sat, 2008-04-19 16:28
No, those are exempt as “Direct Rollovers”. Rollover in this sense means changing markets.