60 day Rollover
There is a lady that is trying to complete a rollover that has to be there in 60 days. Can the money be drafted out of her bank account to complete her 60 day rollover?
There is a lady that is trying to complete a rollover that has to be there in 60 days. Can the money be drafted out of her bank account to complete her 60 day rollover?
Permalink Submitted by Alan - IRA critic on Mon, 2013-06-17 21:45
Yes.
Permalink Submitted by Jennifer Poole on Tue, 2013-06-18 21:27
This is a long story; there was an error through her former employer. She is short $400 in her 60 day rollover. She has made contributions (EFT) from her checking account to her Traditional IRA for $400. Will the tax rate on the 60 day rollover be the same tax rate of the $400 that was contributed in her Traditional IRA? She was told that the $400 that was contributed into her Traditional IRA can’t be coded as a rollover. What is the difference?
Permalink Submitted by Alan - IRA critic on Tue, 2013-06-18 23:25
The contributions made to the TIRA must be reported by the taxpayer as rollover contributions rather than regular contributions for them to replace other funds that were distributed from the employer plan or other IRA, whichever place the distribution came from. If the $400 shortfall is replaced to complete 100% rollover of the original distribution, then tax rates do not matter because there will be no taxable income generated. If the IRA custodian coded the contribution as a regular contribution, they should be able to change it to a rollover contribution since no tax reporting as been done in the last 60 days unless a regular 2012 contribution was made around 4/15. And even if the custodian refused, taxpayer can still request a return of the regular contribution and it can be re contributed as a rollover contribution if within the 60 days. Sounds like these requests need to be made to senior staff at the IRA custodian or whoever is their resource for more difficult IRA transactions.