I think it's an intriguing question with some merit, and I'm not going to dismiss it with a "that's just the way it is," which is what most of the prior responses boil down to.Yes, a bit harsh. So let me try again to summarize the issue.wow some harsh responses to your question...The law (IRC 408(d)(3)(B) does not specifically state that there can no more than one IRA indirect rollover within 365 days. More specifically it states (paraphrasing): an IRA distribution can be excluded from income if rolled over within 60 days. However, an IRA distribution cannot be excluded from income based on the 60-day rollover provision if, withing the prior 365 days, an IRA distribution was excluded from income because it was rolled over within 60 days.
Sec 408 states that in general, an IRA distribution is included in income. 408 goes on to state that an IRA distribution will be excluded from income if rolled over within 60 days. But 408(d)(3)(B) states that an IRA distribution rolled over within 60 days cannot be excluded from income if another IRA distribution in the prior 365 days was excluded from income "because" it was rolled over within 60 days. (quotation added by me)
So let's say I have not done any rollover in the past 2 years and I have a Roth IRA worth $100K including $30K in contributions. If I take a $15K Roth distribution and roll it over back to the Roth account within 60 days, is that distribution excluded from income "because" it was rolled over within 60 days? I would say no - it was excluded from income because it was a nontaxable distribution of Roth contributions and would be excluded from income even if not rolled over. Thus it is not an IRA rollover that is limited to one per year as described in the law, as the law is written.
If the Roth distribution/rollover had been $50K rather than $15K, then the distribution would be excluded from income because it was rolled over and would be included in the one year limitation.
I am not certain this position is correct, but I have not yet seen or heard a cogent legal argument that refutes it.
Statistics: Posted by toddthebod — Fri Sep 20, 2024 11:05 pm