60-day rollovers
Can a client do more than one 60 day rollover out of the same IRA in the same year? If there is a restriction on the number of 60 day rollovers in a year, is it calendar year or rolling twelve months?
Can a client do more than one 60 day rollover out of the same IRA in the same year? If there is a restriction on the number of 60 day rollovers in a year, is it calendar year or rolling twelve months?
Permalink Submitted by Jose Morales on Mon, 2009-03-09 15:50
Individuals are limited to 1 rollover from a retirement plan/account every 12 months. It is a rolling 12 months, not by calendar year.
Permalink Submitted by Alan Spross on Mon, 2009-03-09 17:19
This limitation also includes ANY rollovers from an IRA account that receives an IRA rollover. To illustrate, if you roll over an amount from IRA A to IRA B, you cannot roll over another amount FROM either A or B. That means that B is not allowed ANY outgoing rollovers for the 12 month period.
The answer is moving funds by direct trustee transfer, as these to not count as rollovers. You could partition an IRA into 3 accounts by direct transfer and then do a roll back separately into each one, but I would be wary of carrying this to extremes.
Permalink Submitted by sam jones on Mon, 2009-03-16 11:28
Are there any IRS rulings or publications which state that once you rollover amounts from an IRA into a new rollover IRA that you cannot do a rollover within 12 months from the rollover IRA? It would appear that the new IRA is a new IRA account, and that the 12 month rule should apply separately to that IRA.
Also, there have been several posts where readers have stated that if a person withdraws money from an IRA and rolls it over into two new rollover IRAs within 60 days, that the rollovers are permitted. However, is anyone aware of IRS authority or rulings on this. Looking at the literal language of the Internal Revenue Code, it talks about the amount being withdrawn being rolled over into an individual retirement account, not individual retirement account or accounts.
Thank you in advance.
Permalink Submitted by mk foss on Mon, 2009-03-16 16:38
The rollover rule is once every 12 months per IRA. Presumably you could take funds from IRA 1 on Jan 2, replace it with funds from IRA 2 on Feb 28, replace those funds with money from IRA 3 on April 20 etc etc
There is an example in IRS Pub 590 but it’s not as expansive as the one above.
Permalink Submitted by CHRIS L HAGEN on Tue, 2009-03-31 19:48
Can anyone tell me if this transaction is acceptable. Client received funds from IRA A in October 2008 and rolled funds into IRA B. In March of 2009, client took another distribution from IRA A (direct deposited into his non-IRA bank account). Within a day of the direct deposit, I realized this was a second distribution within a 12 month period. The funds were wired back into IRA A. Transfer paperwork was sent from IRA B company for a Direct Transfer of the Funds. Is there anyway around the “once per year” rollover rule since the funds were wired immediately back into the account?
Thank you for your response.
Permalink Submitted by Alan Spross on Tue, 2009-03-31 20:07
There WOULD have been a workaround if the second distribution was deposited into a Roth IRA as a conversion. It could then be recharacterized back to the TIRA and neither the conversion or the recharacterization count as a rollover for the 12 month rule. But having send it back to IRA A, this account has now issued it’s second distribution that was rolled over (or back). So nothing can be done now other than to correct the roll over as an excess contribution and pay the tax on the rollover plus any earnings on the disallowed rollover prior to correction.
Permalink Submitted by Jose Morales on Tue, 2009-03-31 23:00
It is important to note that moving funds via a wire does not make the transaction an IRA to IRA Transfer. If you complete a distribution form to request the withdrawal, especially if the funds are going to a non-retirement account, the transaction is a reportable distribution.
Permalink Submitted by Jeffrey Vahanian on Wed, 2015-07-22 16:14
Can the owner of an IRA who took a pre-mature withdrawal under the 60-day rule pay back part of the gross distribution made?
Permalink Submitted by Jose Morales on Wed, 2015-07-22 16:33
Yes, they can rollover part of the total distribution. It is not a requirement that the full amount be rolled over or none can be rolled over.