"Herb Smith" <smithff33[at]aol.com> wrote:

- quote -

This is wrong. You're mixing the 120 day period for
avoiding the premature distribution penalty with the 60 day
limit on rollovers, which applies in all cases.

--
Phil Marti
Clarksburg, MD

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shresn01[at]hotmail.com writes:

- quote -

You list the $10,000 in the (a) sub-box of the IRA
distributtions line of the form. You list $0 in the (b)
sub-box of that line. And you write "ROLLOVER" next to it.

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

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shresn01[at]hotmail.com wrote:

- quote -

Since your original intent was to use the money to buy a
house, you actually had 120 days to either buy the house or
return the money to the IRA.

But
- quote -

Write "ROLLOVER" near Line 15b (which should show a -0-)

- quote -

Different situations. Besides, the 401k to IRA rollover was
probably done by direct transfer between 401k custodian and
IRA custodian. There is no limit to the number of direct
transfers you can make between different (or even the same)
IRAs. The "once a year" restriction only applies to
withdrawals where you actually receive the money in your
hands.

BTW, the actual restriction applies to a 12-month period,
not a calendar year.

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<shresn01[at]hotmail.com> wrote:

- quote -

Nor should they. You report it as a "rollover" on line 15
of the 1040. See the instructions for that line.

--
Phil Marti
Clarksburg, MD

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wrote:

- quote -

If the employer 401K went directly to the IRA (administrator
to administrator, you never saw the cash) then it doesn't
count.

Seth

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I just checked with T Rowe Price and they said that I had
returned it within the 60 day period. What a relief. But
they also said that they won't be able to re issue the 1099
to reflect the 10K as non taxable. Do I just file the tax
with taxable amount being $0 instead of the 10K shown in my
current 1099? I talked to one representative in T Rowe Price
and he said that file the amount as non taxable. Any
recommendation to avoid raising a red flag for IRS?

Also is once a year IRA to IRA rollover limit only
applicable to IRA's. In other words, when I rolled over my
employer 401K from previous employer to an IRA and later
that year took it out of the IRA and returned it back to the
same IRA, would that be counted in the 1 year limit?

Thanks for all your comments.

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<shresn01[at]hotmail.com> wrote:

- quote -

What a mess. Maybe now you'll realize that an IRA isn't a
piggy bank that you can fiddle with as you wish.

If you got the money back into an IRA account within 60 days
of the distribution, it's a "rollover," and you report it as
same on Form 1040 line 15 instructions with no tax
consequence. "Instructions" are those things you read before
you act.

If the redeposit was later than 60 days after the
distribution, the distribution is fully taxable and subject
to the 10% premature distribution penalty if you were under
59 1/2 at the time of distribution. You cannot change that
fact now.

It gets worse. If you didn't complete the timely rollover,
your $10,000 IRA deposit is treated as a contribution. This
means you have an excess contribution which you have to
remove from your IRA, along with any earnings on it, by
April 17 or you incur a 6% penalty on the excess in addition
to the tax and penalty you already owe from the
distribution. You will owe tax and the 10% premature
distribution penalty on any positive earnings withdrawn.

The good news is that removing the excess contribution
should provide you the cash you need to pay the tax and
penalty. The bad news is that the $10,000, minus anything
you can treat as a 2005 contribution, is gone from your IRA
forever.

Details are in IRS Publication 590, which you should consult
before you even dream about your IRA.

--
Phil Marti
Clarksburg, MD

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"shresn01[at]hotmail.com" <shresn01[at]hotmail.com> wrote:

- quote -

Well aside from the fact that you made an ineligible
rollover/contribution, nothing. Get the money out of there
YESTERDAY. You had 60 days to put the money back.

--
David M. Woods, EA, ChFC, CLU
Woods Financial Services
Norwood, MA 02062
www.woods-financial.com

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shresn01[at]hotmail.com wrote:

- quote -

When you say 'in a few months', was it over 2? There's a 60
day rule, so on the 61st day, you lose the right to
re-deposit the money. If it was before then, you should call
the broker to work this out.

JOE

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shresn01[at]hotmail.com wrote:

- quote -

Ah! But did you do it within the 60 day grace period? When
you say "in a few month", I suppose you mean "monthS"?

So you have two problems. The distribution is taxable AND
you have an excess accumulation which is another issue, and
for which you should seek local competent tax advice, either
from an Enrolled Agent (EA) or Certified Public Accountant
(CPA).

ChEAr$,
Harlan Lunsford
tue 31 Jan 2006

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In April 2005, I moved job and rolled over from my previous
company 401K and Profit sharing plan to an IRA. Later that
year I thought I was going to buy a house so withdrew 10K
from my IRA. In a few month didn't decide to buy house so
returned the money back to T Rowe price to be put in the
same accounts. I now receive a 1099 R with distribution of
10K.

What can I do to not pay taxes on them. I have already
returned the money.

Thanks,

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