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I borrowed money from my retirement savings plan IRA and was

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told they had 60 days...
I borrowed money from my retirement savings plan IRA and was told they had 60 days to pay it back when I went to pay it back after about 50 days they told me I had 90 days I want to pay it back on the 90's today and they told me that they made a mistake it's only 60 days now I'm being taxed on the money what should I do and they won't accept a reinvest for the full amount
Submitted: 2 years ago.Category: Tax
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Answered in 9 minutes by:
7/23/2015
Tax Professional: Lev, Tax Advisor replied 2 years ago
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 30,721
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Unfortunately - that is correct.The tax law specifically disallow borrowing from IRA accounts - that is classified as a prohibited transaction and reported as taxable distribution.See IRS publication 590B - page 22http://www.irs.gov/pub/irs-pdf/p590b.pdfThe following are some examples of prohibited transactions with a traditional IRA.--- Borrowing money from it.Regarding 60 day period - if we take the money out of IRA and deposit that amount into another (or the same IRA) that transaction is classified as tax-free rollover - and not a distribution.See the same publication - very first page What's New for 2015 - Application of one-rollover-per-year limitation. Beginning in 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. However, you can continue to make unlimited trustee-to-trustee transfers between IRAs because it is not considered a rollover.
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Customer reply replied 2 years ago
I'm not sure if it is actually an IRA otherwise I don't think Putnam would have allowed me borrowing the money
Tax Professional: Lev, Tax Advisor replied 2 years ago
Regarding your relations with the administrator of your account - if you think they acted incorrectly and violated the agreement - that is a different issue.However - based on your information - I do not see any violation...You requested a distribution - and that distribution was granted. You asked to rollover that distribution back after 60 days period - and that request was correctly rejected according to the tax law.As you were provided incorrect information - and that resulted damages - such situation might be viewed as a civil matter between you and Putnam - and you may ask for compensation.However - there is nothing we may do to have the money rolled over after 60 day period. That is not allowed and the IRS would treat that as taxable distribution.
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