Source: https://www.barnesdennig.com/2014/02/60-day-rollovers-clearing-up-the-confusion/
Timestamp: 2019-04-19 02:34:13+00:00

Document:
In the recent tax court case of Bobrow v. Commissioner, the Court found that the rule limiting 60-day IRA rollovers to once per year must be applied on a per taxpayer basis, not on a per IRA basis, contrary to what IRS Pub 590 would suggest. Alvan L. Bobrow, et ux. v. Commissioner, TC Memo 2014-21.
So, what’s with all the confusion?
⑥ September 30, 2008, $40,000 contribution to Wife’s Traditional IRA from their Joint Checking Account. (Taxpayer: valid July 31 partial rollover) (IRS: valid partial rollover; amount unrepaid taxable).
Of crucial importance to the Court was the plain reading of IRC §408(d)(3)(B), which places a limit on the number of 60-day rollovers a taxpayer can do per year to just one. Further, the Court pointed out that the one-year limitation period begins on the date on which a taxpayer withdraws funds from an IRA and it is not applied on a calendar year basis. So, for instance, a taxpayer cannot make a nontaxable 60-day rollover on December 31 of one calendar year and make another nontaxable 60-day rollover on January 1 of the next calendar year.
As shown in the illustration, Taxpayer asserted that there were three separate sets of two matching transactions, each involving a distribution from an IRA followed by a qualified repayment of those funds back to a qualified IRA within 60 days. He argued that the one rollover per year rule is applied on a per IRA basis and that since the distributions were from different IRAs, the 60-day rollover clock started to run separately for each of his retirement accounts.
The Court was quick to disagree and more or less reminded Taxpayer that the §408(d)(3)(B) one rollover per year rule is applied on a per taxpayer basis, not a per IRA basis. The Courts steadfast reasoning behind this position was grounded in policy, stating that Congress’ intent behind enacting §408(d)(3)(B) was to prevent taxpayers from repeatedly shifting nontaxable income in and out of retirement accounts. In the Court’s mind, there really was no other way to read the 60-day rollover rule: one rollover per year, per taxpayer.
In the end, only one of Taxpayer’s rollovers was found to be valid. The other distribution was included in gross income his income and Taxpayer was found to have underpaid his tax by $51,298 in 2008.
“Generally, if you make a tax-free rollover of any part of a distribution from a traditional IRA, you cannot, within a 1-year period, make a tax-free rollover of any later distribution from that same IRA. You also cannot make a tax-free rollover of any amount distributed within the same 1-year period, from the IRA into which you made the tax-free rollover.” [Emphasis added].
Even so, the Court’s reading of the 60-day rollover rule is the law of the land and §408(d)(3)(B) is only applicable once per year, per taxpayer.

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