Hello,

Someone told me that you can withdraw $ from an IRA for up to 60 days penalty free as long as you return the $ within 60 days.

Is this true? If so what are the requirements?

thanks in advance!

That is true - the main requirement is that you can only do it once per year.

Make sure everything is documented because your IRA custodian will issue you with a 1099R showing that the funds were withdrawn, so you need evidence to show they were redeposited within 60 days.

The limit is actually one per 12-month period ( technically that is a year, but to be clear, the year could be fiscal or calendar).

The Custodian of the IRA to which the rollover contribution was made will issue a Form 5498 to report the contribution.

I think the rule is that a taxpayer can make one rollover for each IRA no more than once every 12 months, e.g, rollover on 5/1/02
no rollover is permitted until 5/2/03. Also 12 month restriction only applies for rollover to another IRA. Participant can rollover IRA to qualfied plan within 12 months after rolling funds into IRA from another IRA.

There is no limit on how may rollover contribution an IRA owner can make. There is however, a limit on how may distributions from one IRA, the IRA owner can rollover.

Example:
IRA owner takes a distribution of $10,000 from IRA number 1 on May 1, 2002. IRA owner can rollover this $10,000 to any other of his/her IRA (including the one the distribution was taken from) within 60-days. This rollover contribution does not have to be made in a lumpsum. It can be made in partial amounts, providing the total does not exceed $10,000. Only amounts rolled over within the 60-day period is an eligible rollover contribution.
…also, it is not necessary to rollover the entire amount


If this IRA owner takes any more distributions from IRA number 1 by April 30,2003, this distribution is not eligible to be rolled over.
However, if the IRA owner has another IRA, he/she may take a distribution from that IRA and roll it over within 60-days.

The limit is on the distribution side on a per account basis. I.e. only one distribution from an IRA can be rolled over within a 12-month period


You are right in saying the once per 12-month limit does not apply to direct rollovers involving qualified plans