IRA 60 day withdrawal rule

[AZ-Tax]

TTB 31-21. I called the Mutual Fund retirement dept and I want to check with you pros on this board if I have this correct. Cleint is making a 401K direct rollover into an IRA. Then about 2 weeks after the Mutual Fund receives the funds, the client wants to take a $15K distribution for which $10K will qualify for 1st time homebuyer and the remaining $5K may or may not be needed to cover closing cost. If not needed, the client has the option to put back into her IRA, the $5K within 60 days of the distribution date to avoid penalties and income taxes.

[taxmom34]

perhaps he could be advised to take a distribution of $10,000 for buying the home, and if needed take out the other $5000 or less at a later date.
i was thinking there was a time limit for rollovers , in looking at Tax book, pages 13-21 and 13-22, it seems that maybe the second rollover will be subject to the 10% tax? only one rollover a year?

[Dusty2004]

No limit on direct rollovers?

perhaps he could be advised to take a distribution of $10,000 for buying the home, and if needed take out the other $5000 or less at a later date.
i was thinking there was a time limit for rollovers , in looking at Tax book, pages 13-21 and 13-22, it seems that maybe the second rollover will be subject to the 10% tax? only one rollover a year?

I believe there are no limits on direct rollovers. You can do as many of these per year as you wish. There is a limit on withdrawing the money and rolling it over manually.

Dusty

[Gene V]

I believe there are no limits on direct rollovers. You can do as many of these per year as you wish. There is a limit on withdrawing the money and rolling it over manually.

Dusty

Agreed--Because a trustee-to-trustee transfer of IRA funds is not a rollover, such a transfer is not counted for the waiting period between IRA rollovers (Rev.Rul. 78-406)