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Can your rollover deposit be different than what you took out?

To keep the numbers simple, say I withdrew $25k from a Roth IRA and then at the end of the 60 days deposited back into the account $20k. This is an old account that has been open more than 5 years. Would this cause any problems?

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    A rollover would be from one account to another. Depositing back into the account suggests a loan. Which are you asking about? Either way, what you fail to return will likely be treated as a withdrawal.
    – yoozer8
    Jun 4, 2019 at 22:53

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As yoozer18 says in the comment, your question appears to be contradictory in that you say "rollover" and then "back into the account". A rollover is when you move money from one account to another.

But assuming you mean a rollover, the simple answer is that the amount that you deposit in the new account is a rollover. The amount that you keep is a withdrawal. If you take $25k out of account A and deposit $20k to account B, then you have a $20k rollover and a $5k withdrawal.

You'll commonly hear the financial advice that it is advantageous to have your financial institution transfer any money directly. If you do that, you are not subject to any tax. If you withdraw the money and then deposit it somewhere else, the old account holder is required to withhold tax. You then have to come up with the cash from somewhere else to replace this money when you deposit to the new account, or the withheld tax will be considered a withdrawal subject to tax.

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  • A rollover can be used as a loan. It can go out of one account and back into the same account. My understanding is that this is common practice and my Bank has confirmed that doing this is fine. The only limitation is how often you can do it (once every rolling 12 months). Jun 5, 2019 at 16:19

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