Discussion:IRA 60-Day Rollover, then withdrawal
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Discussion Forum Index --> Advanced Tax Questions --> IRA 60-Day Rollover, then withdrawal
Discussion Forum Index --> Tax Questions --> IRA 60-Day Rollover, then withdrawal
| 4 November 2009 | |
| My client wants to borrow money from an IRA (withdraw the funds and return it to the IRA within 60 days). This will most likely occur in 2009.
In 2010, my client plans to withdraw money from this IRA because their tax bracket will be lower in 2010. Does anyone know if there is a waiting period (after returning the money to the IRA within 60 days) before a withdrawal can be executed? Thanks for your time in advance! | |
| 4 November 2009 | |
| I believe that the rules still say that you can't do more than one rollover (which is what it amounts to) within a 12-month period, but I haven't looked it up. | |
Seaside CPA (talk|edits) said: | 4 November 2009 |
| Don't forget that he will have 20% withheld for federal withholding. When he rolls over the money within 60 days, he will have to make up the difference or be taxed on that 20%. | |
Death&Taxes (talk|edits) said: | 4 November 2009 |
| I don't believe there is mandatory withholding from an IRA....a pension or 401K, yes, but not an IRA.
And from what I read he is not doing two rollovers, but rather putting the first withdrawal back, then taking it out in 2010. | |
Seaside CPA (talk|edits) said: | 4 November 2009 |
| D&T's correct. I read too fast. Would only have mandatory withholding on distributions from qualified plan paid directly to participant. | |
| 4 November 2009 | |
| To answer the question from the original post -- there is no wating period. He can take the 2010 distribution before or after the 2009 distribution is returned to the IRA. | |
| 4 November 2009 | |
| He can only do one 'rollover' within a 12 month period. The second withdrawal will be subject to penalty if no other exception applies. Also subject to tax. as long as he's ok with that, then there is no waiting period. | |
| 5 November 2009 | |
| Going back to the original post -- the client has no desire to do more than one rollover. He merely wants to take some money out of his IRA in 2010 without rolling it back. | |
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