IRA annuity declined 60 day rollover
Hello,
I had a client who withdrew $500 from an trad IRA (individual retirement annuity; the IRA was held within a variable annuity). Rather than open a new IRA within the 60 day period, she wanted to make a 60 day rollover (hadnt done 1 on eth last 12 mos) to replace the $500 and not pay income taxes. The annuity company said they couldnt do it & is sending the $500 back to the client because they claimed to my assistant its a violation of section 11 of a 1940 (securities or SEC??) act. This makes no sense since trad IRAs weren’t in existance then. Is there any precendent for this? Is there any chance they are right and cant accept the 60 day rollover?
Thank you,
Sean
Permalink Submitted by Alan Spross on Tue, 2009-09-08 21:55
They could be right with respect to this particular annuity. The IRS does not force IRA custodians to accept rollovers. The funds may not be able to go back into the annuity contract that distributed them, but they certainly can be rolled over into another IRA account elsewhere. The question is whether it is worth it to use up the one rollover allowed over 12 months for an amount this small.