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Merlo
Merlo, Accountant
Category: Tax
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Experience:  25+ years tax consulting. Specializing in returns for US citizens living abroad
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I inherited an ira from a relative. I know the laws are different

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I inherited an ira from a relative. I know the laws are different regarding inherited ira's.

I take a required distribution, since the owner was over 70 1/2.

I am also aware that the ira cannot be treated as my own and no additional contributions can be made.

My question is, can I take money from the ira and put it back within 60 days. This is not money from another ira or tax free account. (I guess essentially, just borrow the money temporarily. I am putting the money back into the same account, and it would not exceed the amount taken out.)
Submitted: 4 years ago.
Category: Tax
Expert:  Merlo replied 4 years ago.

Hello ker,

 

Inherited IRA's do not permit rollovers. You can only do a direct transfer of an inherited IRA from one custodian to another custodian. Indirect rollovers are not permitted on these types of accounts.

 

If this was helpful please press the Accept button. Positive feedback is also appreciated.

 

Thank you ker

 

 

Customer: replied 4 years ago.
Thanks for your answer, but the money was not really a rollover, just a deposit back to the same account.
Expert:  Merlo replied 4 years ago.

Hello again ker,

 

That is what they call a rollover. When you take money out of an IRA account and then repay it to the same account or a new IRA account within 60 days, that is called a rollover. And rollovers are not permitted on inherited IRA accounts as they are with traditional IRA accounts. A withdrawal that is taken and paid back within 60 days is treated as a rollover, even when the money goes back to the same exact account that is was withdrawn from.

 

If this was helpful please press the Accept button. Positive feedback is also appreciated.

 

Thank you ker

 

 



Edited by Merlo on 3/1/2010 at 5:41 PM EST
Customer: replied 4 years ago.

That'a not what I was explaination from my investment company, otherwise I would have found another way.

 

Now it seems, due to misinformation, that I will be responsible for a huge tax payment.

 

Is there any way to avoid this?

Expert:  Merlo replied 4 years ago.

Hello again ker,

 

I am truly sorry to hear that your investment company gave you the wrong information on this. But unfortunately there is no way to reverse what has been done, and no way to avoid the taxes that will be due.

 

The only thing that I can possibly suggest to you is that you take this matter up with the investment firm who gave you this wrong advice to see if they are willing to help make this up to you in some way. But the IRS will not allow any exclusions to this rule.

 

I am truly sorry I could not have given you an answer with a more favorable outcome, but I can only tell you what the rules are that apply in this situation.

 

If this was helpful please press the Accept button.

 

Thank you ker, and I do hope you can get some resolution from the investment firm.

 

 

Merlo, Accountant
Category: Tax
Satisfied Customers: 9783
Experience: 25+ years tax consulting. Specializing in returns for US citizens living abroad
Merlo and 5 other Tax Specialists are ready to help you

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