60 day rule
Client owns a regular IRA and Roth IRA and spouse owns Roth IRA; both in their 70s and funds have been in the Roth IRAs for over 5 years. They have a short term need for funds and are considering making withdrawals and then putting the funds back within the 60 days.
Will this violate any of the once per year rollover rules? If done in the Roth IRA does that restart the 5 year rule?
Permalink Submitted by Alan - IRA critic on Mon, 2021-01-25 18:10
Each spouse is limited to one 60 day rollover over a 12 month period for all types of IRAs. Therefore, client will have to limit their distribution to either the TIRA or the Roth IRA. The one rollover limitation is based on the date of distribution, not the rollover date. One distribution can be rolled back at different times within the 60 day period, but distributions taken on different days are limited to only one of them being rolled back.
If the distribution is taken from the Roth IRA, it has no effect on the 5 year holding period. Both spouses own fully qualified Roth accounts, so all distributions are qualified and the 5 year holding period is immaterial once a Roth becomes qualified.