Multiple distributions for one 60 day rollover
Scenario is this. Client is age 60+. Building cabin. Recently took a $40k IRA distribution. Is going to take another $100k distribution. The plan is to get a mortgage on property. The question is, can the client redeposit the entire $140k into IRA as one 60 day rollover (assuming the clock starts at the first distribution)?
Permalink Submitted by Alan - IRA critic on Mon, 2016-04-18 19:43
Client can only roll one of the distributions back, as the one rollover limit is measured by the number of distributions, not be the number of rollover contributions. However, there is an end around solution to this. Client could roll one distribution back to the TIRA and convert the other one. Then after waiting for a few months he could recharacterize the conversion and the conversion would be transferred back to the TIRA. Conversions do not count as rollovers which is why this will work.