What would be the examples for once-per-year-rollover-rule?

[fh2000]

I am doing some TIRA to 401K rollovers, and later Roth conversions. From below article, these activities are not subject to once-per-year-rule:

https://www.irahelp.com/slottreport/7-things-you-need-know-about-once-year-rollover-rule

So, if you receive a check from 401K, you have 60 days to rollover to a Rollover IRA, and you can only do that once every 12 months. Why don't you just get the full balance, and rollover to IRA once and be done with it?

What would be the actual examples of once-per-year-rollover-rule?

 

[jebmke]

Example: someone takes a distribution, within 60 days, figures out that it isn't needed so rolls it into another IRA within the 60 days. I've seen it multiple times preparing tax returns.

 

[jebmke]

Another example. Someone figures out in December that they grossly under-estimated the tax withholding and needs to comply with safe-harbor rules. Takes a distribution in December with enough W/H to satisfy the requirements and then puts the full amount back in January. This is probably rare but a technique that might save a large penalty in unusual cases.

 

[kaneohe]

I am doing some TIRA to 401K rollovers, and later Roth conversions. From below article, these activities are not subject to once-per-year-rule:

https://www.irahelp.com/slottreport/7-things-you-need-know-about-once-year-rollover-rule

So, if you receive a check from 401K, you have 60 days to rollover to a Rollover IRA, and you can only do that once every 12 months. ...............

seems to be a contradiction here..............
only IRA to IRA transfers are covered by the 1/yr rule...

 

[travelover]

..........What would be the actual examples of once-per-year-rollover-rule?

Say, you are buying a second house while you wait to sell your first house. You withdraw a pile of money from your IRA to purchase the second house. Your first house sells within 60 days and you re-deposit the pile of money back into your IRA. No taxes owed.


Or as mentioned, you under withheld for taxes and want to avoid a penalty. You withdraw the needed withholding amount from the IRA, have 100% taken out for taxes, then put the same amount back into the account within 60 days from another source.

 

[kaneohe]

You want to move $$ from your broker's IRA to a bank IRA for higher CD yield.
You prefer to do it directly so there is no 1/yr limitation. However your broker charges $30 to that but will issue a check to you for free. You do the latter, deposit the check in your checking account and then write a check to the new bank to get the higher yield. This transaction is subject to the 1/yr rollover rule.