Roth rollover question

[Born2Fish]

Pasted from "Need to liquidate 50,000. Which account."

Quote:

Originally Posted by pb4uski Other alternative is to withdraw from Roth and put the mney back into the Roth when you receive the proceeds from the sale as long as the replacement is within 60 days. https://www.investopedia.com/ask/ans...e%20per%20year.

I bought a used boat last week. I withdrew funds from cash in a ROTH Ira account and paid for the boat.

I am selling the "old" boat.

I found out that I have the option to withdraw the full amount I withdrew from the ROTH from a personal line of credit at my bank, so I can make payments until the old boat sells.

Can I simply transfer the full amount from my checking account and deposit back into the Roth IRA account within the next few weeks?

My ROTH IRA is with Fidelity.

[REWahoo]

I think Roth and tIRA withdrawals are a one-way street.

[Born2Fish]

Quote:

Originally Posted by REWahoo I think Roth and tIRA withdrawals are a one-way street.

Me, too. But PB4's response in the "Need to liquidate..." thread got me wondering...

[NW-Bound]

See the following from the IRS.

It is not clear to me if you need to open another Roth account to redeposit the money, or you can put it back in the same account and call it a "rollover"

Source: https://www.irs.gov/retirement-plans...-distributions

Quote:

You have 60 days from the date you receive an IRA or retirement plan distribution to roll it over to another plan or IRA. The IRS may waive the 60-day rollover requirement in certain situations if you missed the deadline because of circumstances beyond your control. IRA one-rollover-per-year rule You generally cannot make more than one rollover from the same IRA within a 1-year period. You also cannot make a rollover during this 1-year period from the IRA to which the distribution was rolled over. Beginning after January 1, 2015, you can make only one rollover from an IRA to another (or the same) IRA in any 12-month period, regardless of the number of IRAs you own (Announcement 2014-15 and Announcement 2014-32). The limit will apply by aggregating all of an individual’s IRAs, including SEP and SIMPLE IRAs as well as traditional and Roth IRAs, effectively treating them as one IRA for purposes of the limit.

Note the last paragraph. Some financial Web sites still say that if you have multiple accounts, you can "borrow" from each of them once per year. Obviously, the IRS closed this loop hole long ago, and some financial people still have not got the memo.

Similarly, some people still think they can reverse a Roth conversion by "recharacterizing" when it's advantageous to do so. This loop hole has also been closed.

[jazz4cash]

Quote:

Originally Posted by REWahoo I think Roth and tIRA withdrawals are a one-way street.

I’m not sure about Roth but a tIRA withdrawal can be a two way street if you replace the funds within 60 days and you have not had a rollover in in 12 months. When you input an IRA distribution using tax software, it will ask if any of the distribution was rolled over.

[Born2Fish]

I spoke with a Fidelity rep and he told me I can direct transfer from my ckg acct back into the Roth IRA subject to the 60 day time limit.

All good.

[gauss]

Quote:

Originally Posted by jazz4cash I’m not sure about Roth but a tIRA withdrawal can be a two way street if you replace the funds within 60 days and you have not had a rollover in in 12 months. When you input an IRA distribution using tax software, it will ask if any of the distribution was rolled over.

+1

That is my understanding as well. Also works for Roth IRAs in my case (not yet 59 1/2) YMMV.

You also need to make sure that the subsequent deposit is coded by the custodian as a Rollover Contribution.

You are actually making 2 separate transactions and you will receive IRS information filings for each separately (1099-R followed by 5498 the following May)

gauss

[pb4uski]

Quote:

Originally Posted by Born2Fish I spoke with a Fidelity rep and he told me I can direct transfer from my ckg acct back into the Roth IRA subject to the 60 day time limit. All good.

Oh ye of little faith

[Born2Fish]

Quote:

Originally Posted by pb4uski Oh ye of little faith

Not so. I didn’t know the rollover was an option until I read your post in the other thread!!

I called Fidelity to make sure I didn’t eff it up during execution.