60 day rollover

L1: 60 day rolloverA client just started her 72t distribution a few months ago. She is inquirying if she can redeem some funds for down payment of home and then redeposit within 60 days (under the 60 day rollover rule). Is this distribution allowed under 72t?
Thanks.2004-04-14 10:08, By: Bob, IP: [64.190.42.163]

L2: 60 day rolloverIt is a question that has come up before and my answer is my opinion only. And I don’t believe that there have been any previous PLRs on the subject.
As “the Badger” has pointed out, the rollover rules are part of the code and every taxpayer has the right to use. Next question… will the rollover result in a break in the Substantially Equal Periodic Payment Plan? I think yes. In addition, in 2002-62 the IRS has made it pretty clear that…
Thus, a modification to the series of payments will occur if, after such date, there is (i) any addition to the account balance other than gains or losses, (ii) any nontaxable transfer of a portion of the account balance to another retirement plan, or (iii) a rollover by the taxpayer of the amount received resulting in such amount not being taxable.
Pay particular attentions to point (iii) – personal opinion is that it isn’t worth the risk. There have to be other sources of funds that may be far less costly, like the local bank. 2004-04-14 20:03, By: Gfw, IP: [172.16.1.72]