60 Day Rollover Question

Submitted by Kevin O'Hearn on Fri, 2019-08-30 16:59

Hello, a client took 2 distributions on 07/11/19:

IRA 1 $140,000.00
IRA 2 $160,000.00

The client is looking to do a 60 day rollover and is wondering if they can combined the 2 distributions and process a 60 day rollover for $ 300,000.00 into one of the accounts. Is this possible or can only one amount be processed as a 60 day rollover?

Thank you



Submitted by Alan - IRA critic on Fri, 2019-08-30 17:18

  • Since two different accounts issued distributions which will be reported on separate 1099R forms, only one can be rolled back, presumably the 160k would be chosen for the rollover. The other one will be taxable and possibly subject to penalty.  A slightly better solution might be to roll the 140k distribution over to a Roth IRA, as that will avoid the penalty and provide a better qualify IRA than the TIRA it came from.  However, if another distribution of this conversion will be needed from the Roth within 5 years (unless over 59.5), the penalty will be owed on the amount of the Roth distribution. 
  • This error could easily have been avoided by first doing a non reportable transfer to combine the two IRA accounts, then withdrawing 300k from the combined account. There would only have been one distribution, and the 300k or any portion of it could have been rolled back within 60 days.
  • My inpression is that many IRA custodians do not warn taxpayers about the one rollover limit, or provide any guidance on how best to deal with it.

Add new comment

Log in or register to post comments