A 60-day IRA rollover can bridge a cash crunch, with two rules to track

IRA loans are barred under IRS rules, IRAHelp says. An IRA owner has no mechanism to borrow against the account the way a plan participant might borrow from a 401(k).

A 60-day rollover allows a distribution to be redeposited within 60 days with no tax and no penalty, according to IRAHelp. The owner can move the money out and back, and the IRS treats the round trip as a rollover rather than a withdrawal.

First, frequency: the once-a-year rollover limit counts traditional and Roth IRAs together, according to IRAHelp, so a Roth IRA is not a separate allowance. Before recommending the bridge, confirm the client has not already used a 60-day rollover from any IRA in the same year. If the window is used up, the bridge is not available and the next conversation is about another source of cash.

Second, deadline: miss the 60-day window and the distribution may be taxable and penalized, IRAHelp notes. A client waiting on a settlement, a court date or a buyer's financing can miss the window on a delay unrelated to the IRA. Calendar the 60th day when the distribution is taken, not when the client expects the cash to come back. Before the money moves, know which assets can be liquidated and returned in time.