borrowing from and account with 72t

L1: borrowing from and account with 72tI have all of my money in a 72t account and have run into a bind where I need to borrow 65k from my account for 6 months. If I pay it back in the year to my Ira will I break my 72t? 2006-08-26 21:05, By: puzzled, IP: [68.233.152.174]
L2: borrowing from and account with 72tThere are no formal loan arrangements in an IRA, as there is with a 401k account. However, you can access funds from your IRA for up to 60 days and roll the funds back to the account subject to the one rollover rule per 12 months. This would not bust a 72t account even though it would be reported as a non taxable rollover on your tax return. I assume this need for funds is totally in addition to the amount you are required to distribute under your SEPP plan, and therefore you are stuck with only a 60 day limit to roll the funds back.2006-08-26 22:30, By: Alan S., IP: [24.116.68.91]

L2: borrowing from and account with 72tAlan has explained that you can”t make “loans” from your IRA but that you can access more money by doing a “60-day rollover” back into the IRA ONCE in a 12-month period. Now if your SEPP universe consisted of three separate IRA”s, you could repeat Alan”s suggestion three times, in succession, to get your 6-month time period. This can be tricky so get help doing it.
One caution comes to mind when anyone talks about making a “loan” from their IRA. Since we have established that loans are not permitted from IRA”s, then the next thought is usually, “Well, how about using the IRA as collateral for a bank loan?” NO, NO, and NO. Pledging IRA assets as collateral for a loan becomes a “deemed distribution” of the whole amount within the IRA, and it”s tax-paying time when April 15th comes around again. So if you have gone on to this next line of thinking, please stop where you are and look for alternative sources of funds.
Hope this helps.
Jim2006-08-28 08:54, By: Jim, IP: [70.184.2.72]