Rollover IRA "loan"

[purplepenguin7]

I'm so paranoid about this, hopefully someone can talk me down.  I bought a house at the very end of 2020.  Our buyers of my old house screwed us over and I had to borrow some cash from a rollover IRA to close (we weren't contingent) on the new house. I read everything possible, checked with my brokerage firm and a CPA friend of the family that said I could take money from my IRA and not incur any fees/taxes/penalities as long as I rolled it back in within in 60 days.  I did do that, but I crossed the calendar year threshold. Now am I getting tons of tax forms with distributions and capital gains so of course I panicking.  Did I totally f up by withdrawing this money even though I put it back?  My brokerage firm originally told me I could just tell my tax preparer that I rolled it back in in 2022 but i'm still through the roof with aniexty over it.  

[ellipses84]

When you took the “loan” from the IRA did you fill out a form so they wouldn’t automatically take out any taxes and you received the full amount?

As long as you paid back the full amount within 60 days you won’t have to pay taxes.
You are receiving the forms because you still have to report the rollover on your taxes even if you paid it back. I’ve done similar with a 401k when I left a job and I *think* TurboTax asked all the right questions. You report the money that was withdrawn and you report that it was deposited into another account.

[purplepenguin7]

ellipses84, thanks for the reply. There wasn’t a form to fill out but I did check a box not to withhold any taxes (and they didn’t). Hopefully that was enough.

[ellipses84]

Jan 29, 2022 10:48:05 GMT -5 purplepenguin7 said:

ellipses84, thanks for the reply. There wasn’t a form to fill out but I did check a box not to withhold any taxes (and they didn’t). Hopefully that was enough.

Either way it’s fine, but if they withheld taxes you have to pay back the whole amount including the taxes you didn’t receive, which could get complicated crossing a calendar year. Like you borrow $10k, they withhold $1k, you receive $9k but have to deposit the full $10k within 60 days, then it all gets reconciled when you file taxes. Crossing the calendar year is still a little confusing to me but I think they will just used the +60 day date for calculating taxes because that’s when the Grace period ends and they know if you paid it back or not.

[purplepenguin7]

Jan 29, 2022 13:40:54 GMT -5 ellipses84 said:

Jan 29, 2022 10:48:05 GMT -5 purplepenguin7 said:

ellipses84, thanks for the reply. There wasn’t a form to fill out but I did check a box not to withhold any taxes (and they didn’t). Hopefully that was enough.

Either way it’s fine, but if they withheld taxes you have to pay back the whole amount including the taxes you didn’t receive, which could get complicated crossing a calendar year. Like you borrow $10k, they withhold $1k, you receive $9k but have to deposit the full $10k within 60 days, then it all gets reconciled when you file taxes. Crossing the calendar year is still a little confusing to me but I think they will just used the +60 day date for calculating taxes because that’s when the Grace period ends and they know if you paid it back or not.

Sorry if that was worded confusingly. They did not withhold any taxes so the part that I checked was executed correctly.