By Ian Berger, JD
IRA Analyst
Question:
Hi,
I have a client that needs funds for a short period of time, so he plans to use the 60-day rollover rule to borrow money from his IRA and return it within 60 days. He has a Traditional IRA and a Roth IRA. He is under the impression he can do a 60-day rollover for each account. My understanding is that he can only do one 60-day rollover regardless of account type during any 365-day period, so he can only take funds from his IRA or Roth, but not both. Am I correct?
Answer:
You are correct. Traditional IRA-to-traditional IRA rollovers and Roth IRA-to-Roth IRA rollovers are aggregated for purposes of the once-per-year rollover rule.
Question:
Hello Ed Slott Team,
Do dollars that hit the 1040 from a Roth conversion get discounted when calculating MAGI for a Roth contribution? Have a great day!
Answer:
Yes. Modified adjusted gross income (MAGI) is used to determine eligibility for Roth IRA contributions. MAGI is a person’s federal adjusted gross income, with certain adjustments. One of those adjustments is a subtraction of income generated by a Roth conversion. For a full list of adjustments, see “Modified Adjusted Gross Income for Roth IRA Purposes” in IRS Publication 590-A.
https://www.irahelp.com/slottreport/once-year-rollover-rule-and-income-roth-ira-contributions-today%E2%80%99s-slott-report-mailbag