Please note that Portnoff Financial has joined with Tempus Wealth Planning and some information here may no longer be applicable. Please contact Jeremy Portnoff at 949-226-8342 (CA) or 732-226-3113 (NJ) for additional information.  We apologize for any confusion while we are in transition. 



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More 60-Day IRA Rollover Rulings

When you take funds from an IRA (or other retirement plan) payable directly to you, you have 60 days to get the entire amount into an IRA (or other plan) to avoid the distribution being taxable as income. There are many reasons why some IRA owner's are unable to complete the rollover in the 60 day period. IRS has the authority to grant waivers and give the IRA owner's additional time to complete the rollover however the IRA owner must have a valid reason. In many cases, IRS denies these requests. The following are new PLR requests that have come out:

  • PLR 201146024: Denied- IRA owner used funds for an assisted living facility. The IRA owner's daughter who had power of attorney for her mother took the IRA distribution to get her into the assisted living facility and intended to put the money back within 60 days when her mother's home was sold. Unfortunately the sale of the home took longer than expected and she was not able to get the funds back to the IRA with 60 days. IRS denied the request because she used the funds.
  • PLR 201206023: Denied- IRA owner thought he had 90 days to complete the rollover. In many PLRs, the IRS has granted extensions of the 60 day period to allow a taxpayer the additional time to complete a rollover when in the case of advisor/bank/broker/institution error. In this case, the IRA owner claimed that the employee of the bank told him he had 90 days however he did not have any documentation to prove this claim and presumably the bank/bank employee was unwilling to admit error (assuming the IRA owner was telling the truth and received bad advice) and thus IRS denied his request. 
These PLR requests are expensive and in many cases unnecessary. PLR requests for 60 day rollovers begin at $500 and go up to $3,000 just for the request, not including the professional fee to properly draft the request. First many of the mistakes can be avoided, and when some of these mistakes occur, often the rules are clear and relief is unlikely to be granted. If you plan to do a 60 day rollover, make sure that you get the funds back into the IRA within the 60 days and avoid using the money for anything while out of the IRA. Better strategy to work with an advisor who knows the rules and can help you avoid these mistakes in the first place.
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