Tenth of an Hour, Episode 21: No IRA Rollover as Interest-Free Loan under PLR 202033008

by Retirement Advisor | Nov 22, 2022 | Rollover IRA

The IRA rollover provisions allow you to transfer funds from an IRA or retirement plan to another IRA or retirement plan, so long as 60 or fewer days elapse between the first distribution and the depositing of the funds. We have previously examined how this 60-day deadline can be waived if circumstances out of the control of an IRA owner prevent a timely rollover. This often includes error by the financial institution. But, in this discussion, we examine whether the failure of a financial institution to warn you about the 60-day deadline is enough to waive the deadline. Further, this ruling serves as a cautionary tale about using IRA funds for a short-term interest-free loan through the rollover provisions, especially for real estate purchases. While the IRS does not dig into your intent, the tax code and IRS Announcements 2014-15 and 2014-32 limit you to one IRA rollover a year, even to a separate IRA….(read more)