Ira Distribution

[JON]

client pulls $80,000 from IRA and pays it back to the same IRA before 60 days. If he draws from that same IRA again before a year from the first distribution is the second taxable even if he pays it back before 60 days???

[Bees Knees]

Yes it is taxable. When you take money out of an IRA and put it back before the 60 day deadline, it is considered a tax free rollover, even though it goes back into the same IRA. Since you can only do one rollover per year, the second time you pull the stunt makes it not a rollover.

[ChEAr$]

Clarification

Yes it is taxable. When you take money out of an IRA and put it back before the 60 day deadline, it is considered a tax free rollover, even though it goes back into the same IRA. Since you can only do one rollover per year, the second time you pull the stunt makes it not a rollover.

I hope you mean to the same account, for one may, like I do, have several different IRA
accounts with different mutual funds.

[Roland Slugg]

Only one "IRA"

Each taxpayer has only one IRA. He can (and most people do) have it divided between two or more trustees.

When funds are taken from any of the trustees then rolled over in full or part within 60-days, it counts as the one allowable rollover for that year.

[BP.]

Multiple IRA's

Each taxpayer has only one IRA. He can (and most people do) have it divided between two or more trustees.

When funds are taken from any of the trustees then rolled over in full or part within 60-days, it counts as the one allowable rollover for that year.

From Pub 590, p. 25:

Waiting period between rollovers. Generally, if you
make a tax-free rollover of any part of a distribution from a
traditional IRA, you cannot, within a 1-year period, make a
tax-free rollover of any later distribution from that same IRA.
You also cannot make a tax-free rollover of any
amount distributed, within the same 1-year period, from the
IRA into which you made the tax-free rollover.

Example. You have two traditional IRAs, IRA-1 and
IRA-2. You make a tax-free rollover of a distribution from
IRA-1 into a new traditional IRA (IRA-3). You cannot, within
1 year of the distribution from IRA-1, make a tax-free
rollover of any distribution from either IRA-1 or IRA-3 into
another traditional IRA.

However, the rollover from IRA-1 into IRA-3 does not
prevent you from making a tax-free rollover from IRA-2 into
any other traditional IRA. This is because you have not,
be within the last year, rolled over, tax-free, any distribution
from IRA-2 or made a tax-free rollover into IRA-2.

[Roland Slugg]

Thanks ...

... for that correction, BP.

[iratax]

The one IRA pertains to ROTH IRA's not traditional IRA's.