60 day loan from IRA

Submitted by Jeffrey Smith on Tue, 2009-01-20 20:37

Is the 60 day loan from an IRA per person/tax ID or per IRA. Example is a client will be recieving a large check but needs cash before the cash arrives. Can they take a 60 day loan from one IRA and if the funds are not available take a 60 day loan from another IRA, deposit that into their checking, pack back the loan and start a new 60 day clock on the other IRA?



Submitted by mk foss on Tue, 2009-01-20 21:42

Yes, the strategy you describe is available. You can take funds from an IRA and return them withdin 60 days once per year per ACCOUNT.

However, there would be no relief from IRS if the funds aren’t returned in time. IRS in rulings is not sympathetic to folks who borrow from their IRAs temporarily.



Submitted by Jim Bailey on Tue, 2017-04-25 15:07

Is this a calendar year kind of thing? In other words can I take out a loan in December and pay it back in late January? Also is there paperwork involved in this process? In my case how does Wells Fargo know I paid the money back within the 60 day limit? 



Submitted by Alan - IRA critic on Tue, 2017-04-25 16:14

  • The calendar year change does not matter. A distribution taken in December can still be rolled over within 60 days of receipt of the distribution. You are only allowed one such rollover for all your IRA accounts in total within a 12 month running period. That is also not affected by a change in the calendar year.
  • Each distribution is reported to you and the IRS on Form 1099R, and the 1099R is issued in January for the prior calendar year. When you roll the distribution back to an IRA within 60 days, the custodian will report that rollover contribution on Form 5498. The 5498 is issued by 6/1 of the following year for the prior calendar year. The IRS matches the 1099R with the 5498. If you roll a distribution back to the same IRA account it came from the custodian can clearly see if 60 days has passed or not and will not accept the rollover. If you roll it to a different or new IRA account, the custodian will usually accept your statement that the contribution is eligible to be rolled over and that includes both the 60 day deadline and the 12 month one rollover rule.


Add new comment

Log in or register to post comments