zl28 wrote:Wonder if brokerage house had an occurrence where the rollover was disallowed; or did someone do subpar research and now every telephone rep is reading this script with misinformation.
Most likely, they are tired of being blamed when the taxpayer screws up the rollover.
Also, part of the overall problem (from an outsider's view, such as the brokerage) is how you and the client keep on calling this a "loan" and "borrowing". It is neither. It is a distribution followed by a rollover contribution. Even if legal, just as with 401(k) loans, this is IMO a bad mindset for your client to get into (that his IRA is a source of loan proceeds). I strongly recommend using the 60-day rollover only when a trustee-to-trustee transfer is not possible.
Is he really using his IRA effectively, if the money is just sitting in a savings account, not even a CD? And if invested in the stock market, it's generally a bad idea to pay transaction costs to cash out and then back in for 60 days or less, and possibly miss a big increase in investment value.