In a Roth IRA account funded entirely by after-tax 401k rollovers (mega backdoor), is it possible to use the 60 day replacement rule like in this answer assuming only the principal is being taken out and the earnings are being left untouched?

ex. A Roth IRA has 60k all mega backdoor (50k principal, 10k earnings), and the owner withdraws 30k. Can the owner then put that 30k back into the account after, say, 45 days?


Yes. You can do an indirect "rollover" of any amount in an IRA (Traditional IRA or Roth IRA) by withdrawing it and re-depositing the withdrawn amount within 60 days. Whether the money withdrawn is principal, conversions, or earnings, etc. doesn't matter, since a rollover doesn't count as a withdrawal. However, you can only do such an indirect rollover once in any 12-month period.

So yes, in your example, you can even withdraw all 60k from the Roth IRA, and put 60k back into Roth IRA within 60 days, and it would not count as a withdrawal or contribution. (There would be no tax consequences and it won't decrease the amount you can otherwise contribute for the year.) However, once you do this you would not be able to do the same thing again until 12 months later.

  • "you would not be able to do the same thing again until 12 months later" Does the clock start from when the money was withdrawn, or repaid? (I would guess from when it was withdrawn, but I don't know). – TripeHound Jul 19 '20 at 12:11

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