The rules for IRA rollovers changed effective January 1, 2015. Please be sure you are following a guide dated January 1, 2015 or later.

Understanding the difference between an IRA to IRA transfer (recommended method) and an IRA to IRA Rollover

IRA to IRA Transfer: (recommended method)

Funds flow from your account at the former IRA trustee to your account at the new IRA trustee without touching you (the IRA owner):

Q. How often can an IRA be “transferred”?

A. Unlimited

Q. Are there any taxes and penalties?

A. An IRA to IRA Transfer is not a taxable event. As a result, there are no income tax penalties.

IRA to IRA Rollover:

Funds flow from the former IRA Trustee to the owner of the IRA. The owner of the IRA deposits the funds in their personal checking account and writes a check to the new IRA trustee.

Q. How often can IRA funds be rolled-over?

A. IRA rollovers can be done once in a 12-month period (not calendar year).

Q. Is each IRA account counted separately?

A. Each IRA account is not counted separately. However, the 12-month restriction applies to the individual. If you have several accounts, you are permitted only one rollover per 12 months, not one rollover per account.

Q. What happens if I make a second rollover in 12 months?

A. If you make a second rollover in 12 months, it will be treated as an IRA distribution and will be considered a taxable event.

Suggestion: To retain the greatest flexibility consider moving your funds by an IRA transfer (i.e. let us do it for you).

Reference: Internal Revenue Code Section 408(d)(3)(B)

 

For information about the Self Directed IRA or Solo 401(k), call the IRA Club at (888) 795-7950.

IRA Club offers no investments, products or planning services.  Therefore, please consult your attorney, tax professional, financial planner, and any other qualified person before making any investments.