Once a year Rule for IRA Trustee to Trustee Transfer
To Whom It May Concern:
I have a future client who recently consolidated a traditional IRA with a SEP IRA into one traditional IRA in Auguest 2010. Her account value is declining and she would like to have me as her financial professional and transfer her IRA to our firm via trustee to trustee transfer. If I take this IRA via trustee to trustee transfer using our investment options, would this client violate the once a year rule?
Please help me with this question.
thank you in advance for your help.
Andy
Permalink Submitted by Alan Spross on Wed, 2010-11-10 00:02
No, this is not a problem.
The one rollover per IRA account per year only applies to indirect rollovers where the IRA owner receives the funds and roll them over within 60 days. There is no limit at all for direct trustee to trustee transfers, since the IRA owner cannot access those funds. They move directly from the first custodian to the new custodian.
Therefore, you do not even have to be concerned that the client may already have used their one permitted rollover.
Permalink Submitted by John Clark on Wed, 2010-11-10 15:34
Make sure that the money was never sent to her with a check made payable to her. If it was done trustee to trustee and her name alone was not on a check it should be good. I would still call to check. Have you considered just changing the Broker of Record? Just a thought! Regards, JC.