60 Day Rollover Rules
My client wants to withdraw $125,000 from his IRA Rollover account. He is currently under 59 1/2 and has not taken any other IRA distributions in the last 12 months. Can he pull this money out, avoid the taxes and penalties, as long as he puts it back into the account within the 60 day period? He is buying a second home by the end of the year and is afraid his mortgage company will not come through with the financing by 12/31. I know we used to be able to do this without a problem. However, I also know they changed / closed some of these rules this year and want to be certain he is not going to run into any challenges. Thank you in advance for your assistance.
Permalink Submitted by Alan - IRA critic on Fri, 2015-12-04 00:44
Yes, this could be client’s one rollover for the next 12 months. However, client needs to be very careful with respect to timing because if he misses the 60 day deadline due to any number delays that real estate transactions are subject to, this amount will become taxable and subject to penalty. He is not likely to get the deadline extended by an IRS letter ruling since the IRS is not sympathetic to use of IRA money for short term loans.