Can I do this? IRA -> HSA -> me -> IRA?

What your scenario boils down to is a short-term 60-day loan from your IRA, limited by the maximum annual contribution amount to an HSA. You will get exactly the same tax benefit from your HSA whether you do it this way or some other way.

Yes, you can do it, but there are risks involved if something doesn't go right and you can't get the money back in to the IRA timely, plus the IRS may later ask you for additional proof you made the rollover on time. While the money is out of your IRA, you are missing out on possible investment gains (although you could have your HSA invested in the same equities, I suppose). Not to mention the transaction fees in your tax-deferred accounts...

Is all that worth it just to avoid interest on a four-figure loan for two months? You already ponied up the reimbursable medical payments from some other source of funds, so why not just make the HSA contribution first, then use the HSA funds to make the medical payments?

? There's no HSA contribution in this scenario. However, there's an IRA contribution that might be deductible.

I (mis)read the first two lines to mean a transfer from IRA to HSA. Which then permits a legitimate tax free withdrawal for medical expenses. This cash can then be deposited pre-tax back into an IRA as a current year deposit.

That could be another approach - a once-per-lifetime HSA funding contribution can be made by transfer from an IRA.

The net result in all cases is that qualified medical expenses will be tax deductible, which is the main point of an HSA. It can be done in a straight-forward way, or any one of several round-about ways, but I don't see any particular tax loophole here where one gets something for nothing.

When all is said and done, an HSA is very much like an IRA except that you can flow more tax-deductible medical expenses through it.

- Take funds from an IRA,

- Use that money to make an HSA contribution,

- Do an HSA distro (reimbursing medical bills pd this year),

- Put the money back in the IRA, within 60 days.

... And, that HSA contribution could be taken as an adjustment to income (1040, line 25), incurring no penalties or additional taxes. ============ I don't think the end result is what you want....

IRA->HSA: Yes, that is a contribution and permitted once in a lifetime. HSA->Cash: Yes, with reimbursable expenses, tax free distribution. however Cash->IRA: CONTRIBUTION, NOT A ROLLOVER.

There is no provision for an HSA->IRA rollover. Once the IRA->HSA rollover completes, the funds are HSA-linked, not IRA-linked. That wipes out the non-direct IRA rollover within 60 days treatment that would be allowed if this were "IRA->cash->IRA."

Now, if what you want is credit for both an HSA and IRA contribution deductions with "no money input," that could succeed but has no 60-day clock. However, if the IRS were to audit, I would bet that they would try to challenge the economic substance of the combined 3 steps even though each step is separately allowable on the grounds that the entire transaction nets to zero (i.e. no outside funds used).

You're right - that's not the result I wanted. Just to be sure I'm being clear, I knew that an IRA -> HSA 'transfer' (trustee-to-trustee?) is not an HSA *contribution*; my thought (hope?) was that, by taking the IRA distro as a 'short-term loan' [1] I could cut that connection - ie, the IRA funds come to *me*, and then *I* make a (line 25) HSA contribution. And then just put the money back in the same IRA, per the link below.

I take it you're saying, nope.

Oops: Reading your post more carefully: no, I don't want to make a creditable IRA contribution. I just want the HSA contribution credit, with no complications from that the funds come from the IRA.

Apologies for the confusion.