Permalink Submitted by Alan - IRA critic on Sat, 2022-03-12 17:41
First, you must have an available rollover in order to roll the distribution back to your Roth IRA, and there is a 60 day deadline to return the funds. This is like any other distribution you would request from your Roth custodian. If you return the funds within 60 days you report a distribution and rollover on your tax return directly on line 4 of Form 1040. There is no separate form. If you cannot return the funds, then the distribution is still reported on Form 8606, and whether it is tax and penalty free depends on how much you contributed to the Roth and your age. You would need to know how much you contributed in the past and how much you withdrew in the past, if any. If you only return part of the distribution, then part will be reported as a rollover and part on Form 8606 as a distribution.
Permalink Submitted by David Mertz on Sat, 2022-03-12 23:20
To be clear, this is technically not a loan from the IRA. It’s a distribution and rollover, and you just happen to use the funds for something temporarily during the 60-day rollover window.
Permalink Submitted by Alan - IRA critic on Sat, 2022-03-12 17:41
First, you must have an available rollover in order to roll the distribution back to your Roth IRA, and there is a 60 day deadline to return the funds. This is like any other distribution you would request from your Roth custodian. If you return the funds within 60 days you report a distribution and rollover on your tax return directly on line 4 of Form 1040. There is no separate form. If you cannot return the funds, then the distribution is still reported on Form 8606, and whether it is tax and penalty free depends on how much you contributed to the Roth and your age. You would need to know how much you contributed in the past and how much you withdrew in the past, if any. If you only return part of the distribution, then part will be reported as a rollover and part on Form 8606 as a distribution.
Permalink Submitted by David Mertz on Sat, 2022-03-12 23:20
To be clear, this is technically not a loan from the IRA. It’s a distribution and rollover, and you just happen to use the funds for something temporarily during the 60-day rollover window.