Submitted By: someone
Answered: February 22, 2022 2:19 am

I used my IRA funds to help my child buy a home. The broker promised the sale would close in 30 days, with the financing sufficient to return the funds to me so I could put the money back in my IRA. Unfortunately, the sale didn’t close until 65 days after I took the distribution. Is there anything I can do?

Unfortunately, the distribution cannot be rolled back into the IRA because the 60-day rollover period has passed; it is a taxable distribution. The rollover deadline can be waived for certain situations that are beyond a taxpayer’s control that prevented completion of an intended rollover, such as a serious illness, a mistake by the financial institution, or a casualty event. However, because the funds were used as a loan, the IRS won’t grant an extension (see, for example, Letter Ruling 200446030).

Tax Glossary

Passive activity loss rules

Rules that limit the deduction of losses from passive activities to income from other passive activities. Passive activities include investment rental operations or businesses in which you do not materially participate.

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